Jack,age 30 and Married with No Dependents,is a Self-Employed Individual

question 86

Multiple Choice

Jack,age 30 and married with no dependents,is a self-employed individual.For 2012,his self-employed business sustained a net loss from operations of $10,000.The following additional information was obtained from his personal records for the year: Based on the above information,what is Jack's net operating loss for the current year if he and his spouse file a joint return?

• A) $2,000.
• B) $8,000.
• C) $10,000.
• D) $11,000.
• E) $16,400.

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Definitions:

Sales Tax

A tax imposed by governments on the sale of goods and services, calculated as a percentage of the sales price.

Proportional Rate Structure

A tax system where the tax rate remains constant regardless of the amount of income, as opposed to progressive or regressive tax structures.

Progressive Rate Structure

This is a tax system in which the tax rate increases as the taxable base amount increases, typically applied to incomes to ensure higher earners pay a greater percentage of their income.

Regressive Rate Structure

A tax system where the tax rate decreases as the taxable amount increases, placing a higher burden on lower earners relative to higher earners.