question archive Daria is a part time employee who recently started up her own business as a sole proprietorship
Daria is a part time employee who recently started up her own business as a sole proprietorship
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Daria is a part time employee who recently started up her own business as a sole proprietorship. For the current year, she had the following sources of income and loss:
Part time employment income
$15,000
Net business loss
18,000
Taxable (grossed up) dividend income
1,200
Interest expense on loan to purchase investments
2,000
Capital gain
12,000
Capital loss
16,000
What is her non-capital loss carry forward for the year?
A.$3,000.
B.$3,800.
C.$5,800.
D.$18,000.
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Answer: D .
Non capital loss consists of loss from employment, house property, and business losses. It is basically those losses which excludes losses from sale or purchase of capital asset.
Capital loss c/f = capital gain - capital loss
Capital loss c/f = 12000 - 16000
Capital loss c/f = $ 4000
Non capital loss c/f = $ 18000
Note: business losses cannot be set off from employment income.
Thus, correct answer is D.
