Margaret, a married taxpayer filing a joint return, engaged in two business activities this year. Business A earned $420,000 of profit. Business B incurred a loss of $(995,000).

Required:

How much of Margaret's net business loss is not currently deductible?

Note: Negative amount should be entered with a minus sign.

Jahlil is a 10 percent partner in a partnership that incurred a $4 million business loss this year. Jahlil has no other business activities.

Required:

How much of Jahlil's partnership loss can he deduct this year if he is single? What if he is married filing jointly?

Note: Enter your answers in dollars not in millions of dollars.

Corporation VB was formed in 2022. Immediately prior to year-end, VB is considering a $500,000 deductible expenditure. It can either make the expenditure before the end of 2022, or wait until 2023. However, if it waits, the cost of the expenditure will increase to $525,000. Before considering this expenditure, VB has the following projected pretax cash flows and taxable income for 2022, 2023, and 2024. Use Appendix A.

	2022	2023	2024
Taxable income and pretax cash flow	$ 120,000	$ 400,000	$ 700,000

Required:

Using a 5 percent discount rate, compute the NPV of VB's after-tax cash flows if the expenditure is in 2022.

Using a 5 percent discount rate, compute the NPV of VB's after-tax cash flows if the expenditure is in 2023.

Based on your calculations, when should VB make this expenditure?