Corporation Taxable Income a) For the current year, Wish Corporation had ordinar
ID: 2456095 • Letter: C
Question
Corporation Taxable Income
a) For the current year, Wish Corporation had ordinary income from operations of $80,000, a net long-term capital gain of $17,000, and a net short-term capital loss of $7,000. Compute Wish’s taxable income for the year.
b) For the current year, BB Corporation had net income from operations of $65,000 and a net long-term capital loss of $9,000. It also had a net short-term capital gain of $7,000. Compute BB’s taxable income for the year.
c) For the current year, before considering capital loss carryovers, Adam Corporation had a net long-term capital loss of $8,000 and a net short-term capital loss of $3,000. Its net capital loss carryover from last year was $2,000. How much is Adam’s capital loss carryover to the next tax year, and what is its nature, (long-term or short-term)?
Explanation / Answer
a) ordinary income from operations = $80,000
Net long-term capital gain = $17,000
net short-term capital loss of $7,000
Wish’s taxable income for the year. = 80000 + 10000 (17000-7000) = 90000
b) net income from operations = $65,000
net long-term capital loss = $9,000
Net short-term capital gain = $7,000
BB’s taxable income for the year = 65000 +7000 = 72000
c) net long-term capital loss = $8,000
net short-term capital loss =$3,000.
Net capital loss carryover from last year was $2,000
Adam’s capital loss carryover to the next tax year= 8000 + 2000 = 10000
its nature is long term