Rick and Sara had no taxable income for the years 2005, 2006, 2007, and 2008 and $4000 of taxable income for 2009 computed as follows:
- Salary $25,000
- Capital loss ( $1,000)
- AGI $24,000
Less Itemized deduction
- Charitable contributions limited to 50% of AGI $12,000
- Medical expenses of $2100 limited $300
- To in excess of 7.5% (2100-1800) ($12,300)
- Exemptions (2 * $3,650) ($7300)
- Taxable income $4,400
a. Determine Rick and Sara's recomputed taxable income for 2009
b. Determine the amount of Rick and Sara's 2010 NOL to be carried forward to 2011.