Evans Corporation Has a $15,000 Net Capital Loss in 2011

question 17

Multiple Choice

Evans Corporation has a $15,000 net capital loss in 2011. The corporation reported the following capital gain net income during the past three years. Identify which of the following statements is true. $$\begin{array} { | c | c | } \hline \text { Year } & \begin{array} { c } \text { Capital Gain } \\\text { Net Income }\end{array} \\\hline 2008 & \$ 10,000 \\2009 & 11,000 \\2010 & 5,000 \\\hline\end{array}$$

• A) The loss is used to offset the gains from 2010 and then carried back to offset $10,000 of the gains in 2008.
• B) The loss is used to offset the $11,000 of the 2009 gains and then carried back to offset $4,000 of the year 2008 net gain.
• C) The loss is used to offset $3,000 of the current year ordinary income, all of the year 2008 capital gains, and $7,000 of the year 2009 net gain.
• D) The loss is used to offset the year 2008 net gains, then $5,000 of the year 2009 net gains.

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