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Business, 06.12.2019 06:31 Miccyy

Carmen purchased a business for $150,000 by investing $40,000 of her own funds and borrowing $110,000 from local national bank. carmen signed the note payable as a personal guarantor. in the first year of operation, the business had an operating loss of $120,000. the business incurred an operating loss of $45,000 in the second year and had operating income of $25,000 in the third year. what is the maximum carryforward loss deductible against the third year’s income? assume that carmen materially participates in the business.
a. $20,000
b. $15,000
c. $30,000
d. $45,000
e. $120,000

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