Which of the Following Is True with Respect to Capital

question 38

Multiple Choice

Which of the following is true with respect to capital gains and losses of a corporation?

• A)A corporation can offset ordinary income with capital losses.
• B)A corporation pays 15 percent long-term capital gains rate, just like an individual.
• C)A corporation can carry a capital loss back 5 years.
• D)A corporation can carry a capital loss forward 5 years.

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Definitions:

Annual Rate

A periodic interest rate calculated over a year, often representing the cost of borrowing money or the earnings from an investment.

Vendor's Invoice

A document from a seller to a buyer that describes the products or services sold, their quantities, and the prices agreed upon.

Net Working Capital

The variance between an organization's immediate assets and its short-term liabilities, showcasing its financial stability in the short run.

Revolving Credit

A credit line where the customer can borrow up to a set limit, pay back, and then borrow again, offering flexibility in borrowing and repayment.