Question

Civic corporation incurred a net-long term capital loss of $11,000 in 2015. It also had gross...

Civic corporation incurred a net-long term capital loss of $11,000 in 2015. It also had gross receipts from sales of $20,000 and deductible of $220,000 in 2015.

a. Determine Civic's 2015 tax liability (Hint: use corporatetax rate please) '

b. what are the earliest and latest years to which civic can carry its capital loss?

c. b. what are the earliest and latest years to which civic can carry its capital loss?

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Homework Answers

Answer #1

Civic’s gross income is $20,000, and its taxable income is $ 0 ($20,000 – $20,000).

The $11,000 net capital loss does not affect taxable income in 2015. Civic Corporation carries the loss back to 2012, 2013, and 2014, in that order, to offset any net capital gains of those years. If the loss is not exhausted, the remainder is carried, in order, forward to 2016,2017, 2018, 2019, and 2020. The $11,000 is treated as a short-term capital loss in any of the carryback or carryforward years.

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