Goose Corporation, a C corporation, incurs a net capital loss of $12,000 for 2020. It also...

Goose Corporation, a C corporation, incurs a net capital loss of $12,000 for 2020. It also has ordinary income of $10,000 in 2020. Goose had net capital gains of $2,500 in 2016 and $5,000 in 2019.

Answer the following:

a. Determine the amount, if any, of the net capital loss of $12,000 that is deductible in 2020.

b. Determine the amount, if any, of the net capital loss of $12,000 that is carried forward to 2021.

Please show all calculations and explain. Thank you.

Expert Solution

A.

For corporations, capital losses can only offset capital gains and not ordinary income.The capital loss can be carried back for up to 3 years and carried forward for 5 years.Net capital loss in 2020: (12,000)

Carried back years in this order: 2017, 2018, and 2019

The ordinary income of $10,000 in 2020 would not make any difference here since again, capital losses for corporations can only offset capital gains.So then in 2020, none of the capital losses will be deductible simply because there are no capital gains in 2020

.b.

Determine the amount, if any, of the net capital loss of $12,000 that is carriedforward to 2021.If capital losses are still remaining after carry back, then they can be carried forward in this order:2021, 2022, 2023, 2024and 2025.Goose Corporation does have capital gains of $5,000 in 2019.

Of the $12,000 net capital loss,$5,000 is carried back to 2019,and deductible against the $5,000 net capital gain of that year. The remaining $7,000($12,000 – $5,000) of the net capital loss is carried forward to 2021

ekkarill92 answered 2 years ago

How to calculate a capital-loss carryforward for a C corporation?

Paris Corporation holds a $100,000 unrealized net capital gain and a capital loss carryforward that will...

Paris Corporation holds a $100,000 unrealized net capital gain and a capital loss carryforward that will expire in the current year. Paris is subject to a 14 percent cost of capital. Its marginal tax rate is 25 percent. Should Paris accelerate the recognition of this gain from next year to this year, assuming a net capital loss carryforward in each of the following amounts? $40,000 $10,000 Repeat the computation using the amounts in parts a and b, but this time...

A corporation has non-capital loss carry forwards and net capital loss carry forwards. How does management...

A corporation has non-capital loss carry forwards and net capital loss carry forwards. How does management decide which of these carry forwards should be deducted first? (NEED ANSWER IN DETAIL)

A corporate net operating loss arising in 2019 for a calendar year C corporation can be...

A corporate net operating loss arising in 2019 for a calendar year C corporation can be carried back 2 years and forward 20 years to offset taxable income for those years. True False

Bass, a C corporation, has a net short-term capital gain of $20,000 and a net long-term...

Bass, a C corporation, has a net short-term capital gain of $20,000 and a net long-term capital loss of $90,000 during 2019. Bass also has taxable income from other sources of $1 million. a. Assume there are no prior year capital transactions. How are the 2019 capital gains and losses treated on Bass’ 2019 tax return and is there any potential impact to other tax years? b. If Bass were a proprietorship, how would Ellen, the owner, report these transactions...

Ostrich, a C corporation, has a net short-term capital gain of $20,000 and a net long-term...

Ostrich, a C corporation, has a net short-term capital gain of $20,000 and a net long-term capital loss of $90,000 during 2019. Ostrich has $425,000 in taxable income from other sources. Prior years’ transactions included the following: 2014 net short-term capital gains $10,000 2015 net long-term capital gains 18,000 2016 net long-term capital gains 15,000 2017 net short-term capital gains 25,000 2018 net long-term capital gains 5,000 Required: a. How are the capital gains and losses treated on Ostrich’s 2019...

Stolberg Company reported a net loss of $12,000 for the year ended December 31, 2022. During...

Stolberg Company reported a net loss of $12,000 for the year ended December 31, 2022. During the year, accounts receivable decreased $28,000, inventory increased $20,000, accounts payable increased by $30,000, and depreciation expense of $24,000 was recorded. During 2022, operating activities Group of answer choices used net cash of $14,000. used net cash of $50,000 provided net cash of $50,000 provided net cash of $74,000

Cold Goose Metal Works Inc. just reported earnings after tax (also called net income) of $8,500,000,...

Cold Goose Metal Works Inc. just reported earnings after tax (also called net income) of $8,500,000, and a current stock price of $23.00 per share. The company is forecasting an increase of 25% for its its after-tax income next year, but it also expects it will have to issue 2,000,000 new shares of stock (raising its shares outstanding from 5,500,000 to 7,500,000). If Cold Goose's forecasr turns out to be correct and its price-to-earnings (P/E) ratio does not change, what...

Cold Goose Metal Works Inc. just reported earnings after tax (also called net income) of $9,000,000...

Cold Goose Metal Works Inc. just reported earnings after tax (also called net income) of $9,000,000 and a current stock price of $34.00 per share. The company is forecasting an increase of 25% for its after-tax income next year, but it also expects it will have to issue 2,500,000 new shares of stock (raising its shares outstanding from 5,500,000 to 8,000,000). If Cold Goose’s forecast turns out to be correct and its price/earnings (P/E) ratio does not change, what does...

What is a Capital Asset?, Holding Period, and Calculation of Gain or Loss, Net Capital Gains...

What is a Capital Asset?, Holding Period, and Calculation of Gain or Loss, Net Capital Gains (LO 8.1, 8.2, 8.3) During 2017, Tom sold Sears stock for $26,200. The stock was purchased 4 years ago for $36,680. Tom also sold Ford Motor Company bonds for $91,700. The bonds were purchased 2 months ago for $77,945. Home Depot stock, purchased 2 years ago for $2,620, was sold by Tom for $3,930. Calculate Tom's net gain or loss, and indicate the nature...

Question