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Mowrey Inc. has gross income of $400,000 (including $150,000 capital gain) and operating expenses of $500,000....

Mowrey Inc. has gross income of $400,000 (including $150,000 capital gain) and operating expenses of $500,000. Mowrey Inc. has an unexpired capital loss carryover of $40,000.   What is Mowrey’s net operating loss (NOL)?

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Answer #1

Mowrey INc.'s Gross Income of $4,00,000.

Operating expenses of $ 5,00,000.

So, while computing Mowrey,s Net operating Loss we will deduct Its expenses out of its income .

NOL = Gross Income - Operating expense

NOL = $ 4,00,000 - $ 5,00,000

Therefore, Mowrey's NOL is of $1,00,000.

Note - Unexpired capital loss carryover of $40,000 will not gonna make any difference to our answer. As, it was already booked in the last year. For this year, it is of no relevance.

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