Carrot Corporation, a C corporation, has a net short-term capital gain of $65,000 and a net long-term capital loss of $250,000 during 2018. Carrot Corporation had taxable income from other sources of $720,000. Prior years’ transactions included the following: 2014 Net long-term capital gain $150,000 2015 Net short-term capital gain 60,000 2016 Net short-term capital gain 45,000 2017 Net long-term capital gain 35,000 Compute the amount of Carrot’s capital loss carryover to 2019. a. $0 b. $32,000 c. $45,000 d. $185,000 e. None of the above

Respuesta :

Answer:

c. $45,000

Explanation:

Net capital loss = net short-term capital gain of 2018 - net long-term capital loss during 2018

                          =   $65,000 -  $250,000

                          = -$185,000

total capital loss set off = 2015 Net short-term capital gain + 2016 Net short-term capital gain +  2017 Net long-term capital gain

                                       = $60,000 + $45,000 + $35,000

                                       = $140,000

amount of loss carryover to 2019 = $185,000 - $140,000

                                                       = $45,000

Therefore, The amount of Carrot’s capital loss carryover to 2019 is $45,000.

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