Question

Suppose an object has 40 N of tension force pulling it upward and 60 N of gravitational force pulling it downward. There are no other forces acting on the object. The object then has a net upward force of 20 N.

Answer 1

Actually it's going to be a net downward force of 20 N. Look at the free body diagram:
If you add together these forces, you get 40 N + (-60) N = -20 N.

Here' I'm calling up the positive direction, meaning down is the negative direction. Tension (T) pulls up with 40 N of force, while the force of gravity (F(g)) pulls down with 60 N of force. The net force is -20 N, which means 20 N downwards.