Question

Question One: Explain the taxation of capital gains and losses for a C-Corporation. I already know that C-corporations that pay qualifying dividends to their shareholders will qualify those dividends for special capital gains rates. I want you to tell me how C-Corps pay taxes on capital gains and losses. Include any necessary holding periods (long-term vs. short-term gains and losses).

Answer 1

Answer:

Capitral gain and loss for c corporaton.. pass through entities are not tax paying entities; they are tax-reportig entities (with some exceptions for S corporations). Items of income, deductions, gains, losses and credits are passed through the entity to the owner via Schedule K-1.

Most corporations short and long term capital gain and losses are initially repported on form 8949 (sales and Dsipositions of capital assets ) Then any net short-term gain or loss is combined with any long term gain or loss.The resulting net capital gain or loss is treated as a short term capital gain or loss