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 on her 2019 and future tax returns if there is any impact

Expert Solution

Here, LTCG and STCG will be Set off against each other which leads to Final loss of LTCG of Around 90000 $ -20000$ = 70000$ to be carrieed forward.

LTCG will never be set off agianst Other Income.

In Next year, If there is any LTCG/ STCG then LTCL of 70000$ shall be set off against those and thenif any balance still exist then same shall be further carrieed forward else. no need to carry forward.

Company will pay Tax on 1 Million Dollars Other income at the rate of Corporate tax.

For Brevity Long Term Capital Gain is written as LTCG and Short Term Capital Gain is written as STCG.

It will not has any impact or change in Treatment if the Status of the tax payer is Corporate / Proprietorship company both ahving same treatement of Income Tax.

However, The proprietor will pay approx Individual slab tax rate over the other income sources rather than corporate tax rate. else treatement for Cpaital Gain / loss will remain same.

ekkarill92 answered 2 years ago

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...

A simple trust has ordinary income of $56,000, a long-term capital gain of $20,000 (allocable to...

A simple trust has ordinary income of $56,000, a long-term capital gain of $20,000 (allocable to corpus), and a trustee commission expense of $5,500 (payable from corpus). The two income beneficiaries, Woo and Jae, are entitled to the trust's annual accounting income, based on shares of 60% and 40%, respectively. Woo is allocated DNI of $________ and Jae is allocated DNI of $._________

Long term capital gain

Jayne purchased General Motors stock 6 years ago for $20,000. In 2016, she sells the stock for $35,000. What is Jayne’s gain or loss?a. $15,000 short-term gainb. $15,000 long-term gainc. $15,000 ordinary lossd. $15,000 extraordinary gaine. No gain or loss is recognized on this transaction

During 2018, Crown Corporation, a calendar year C corporation, has net short-term capital gains of $50,000,...

During 2018, Crown Corporation, a calendar year C corporation, has net short-term capital gains of $50,000, net long-term capital losses of $80,000, and taxable income from other sources of $270,000. Prior years' transactions included the following. 2014 net short-term capital gains $12,000 2015 net long-term capital gains 10,000 2016 net short-term capital gains 9,500 2017 net long-term capital gains 7,000 If an amount is zero, enter "0". a. How much is Crown's net capital loss for 2018? $ What is...

After netting all of his short-term and long-term capital gains and losses, Sam has a net...

After netting all of his short-term and long-term capital gains and losses, Sam has a net short-term capital loss and a net long-term capital gain/ Can he net the ST capital loss and LT capital gain against each other? Why or why not? Also, Sam purchased equipment for use in his business for $60,000 back in 2014. He has taken $37,500 of regular MACRS depreciation. Sam then sells the equipment in 2017 for $28,500. What is the amount and character...

QUESTION 15 Martell incurred a net long-term capital loss of $4,000 and no short-term capital gains...

QUESTION 15 Martell incurred a net long-term capital loss of $4,000 and no short-term capital gains or losses. Assuming his other income is $40,000, he will be able to deduct what amount? a. $2,400 b. $4,000 c. $2,000 d. $3,000 QUESTION 16 If the taxpayer qualifies under § 1033 (nonrecognition of gain from an involuntary conversion), makes the appropriate election, and the amount reinvested in replacement property is less than the amount realized, realized gain is: a. Recognized to the...

Adam is an individual taxpayer who has these following activities: 2016: Short-term capital loss of (20,000),...

Adam is an individual taxpayer who has these following activities: 2016: Short-term capital loss of (20,000), a short-term capital gain of 12,000, a Long-term capital loss of (15,000), and long-term gain of 10,000 2017: Short-term capital loss of (20,000), a short-term capital gain of 12,000, a Long-term capital loss of (12,000), and long-term gain of 20,000 2018: Short-term capital loss of (6,000), a short-term capital gain of 28,000, a Long-term capital loss of (11,000), and long-term gain of 30,000 Q1:...

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...

How do different kind of capital short and long-term, as well as long term foreign direct...

How do different kind of capital short and long-term, as well as long term foreign direct investments affect development prospects?

Saunders Corp. has a book net worth of $11,150. Long-term debt is $2,300. Net working capital,...

Saunders Corp. has a book net worth of $11,150. Long-term debt is $2,300. Net working capital, other than cash, is $2,950. Fixed assets are $2,750 and current liabilities are $1,500. Required: (a) How much cash does the company have? (Click to select) 9,250 10,700 8,400 9,528 8,972 (b) What is the value of the current assets? (Click to select) 13,015 4,450 14,385 13,426 13,700

Question