In 2011,Bob's Unincorporated Business Has a Net Loss of $24,000

question 72

Essay

In 2011,Bob's unincorporated business has a net loss of $24,000.Bob has investment income of $30,000.Itemized deductions and personal exemptions total $26,000.Thus,on his 2011 tax return,his taxable income was a negative $20,000.In 2011,Bob discovered that an employee has stolen $28,000 (pocketing the proceeds from unrecorded sales)from the business.This $28,000 theft loss is included in calculating the net loss of Bob's business of $24,000.In 2012,Bob recovers the $28,000 from the former employee.How can the tax benefit rule assist Bob in 2012?

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