In 2016, Bluebird Corporation Had Net Income from Operations of $100,000

question 38

Multiple Choice

In 2016, Bluebird Corporation had net income from operations of $100,000. Further, Bluebird recognized a long-term capital gain of $30,000, and a short-term capital loss of $45,000. Which of the following statements is correct?

• A)Bluebird Corporation will have taxable income in 2016 of $100,000 and will have a net capital loss of $15,000 that can be carried back 3 years and forward 5 years.
• B)Bluebird Corporation may use the capital loss to offset the capital gain and must carry the net capital loss of $15,000 forward five years as a short-term capital loss.
• C)Bluebird Corporation may deduct $33,000 of the capital loss in 2016 and may carry forward the remainder of the capital loss indefinitely to offset capital gains.
• D)Bluebird Corporation will have taxable income in 2016 of $85,000.
• E)None of the above.

---

Definitions:

Germ Theory

The scientific theory that microorganisms are the cause of many diseases, fundamentally changing our understanding of infection and hygiene.

Medical Research

The study and investigation in the field of medicine, aiming to discover or improve medical knowledge and treatments.

Dispositional Factors

Personal attributes or traits that influence an individual's behavior and attitudes, in contrast to situational factors.

Nisbett and Wilson

Two psychologists known for their research in the field of cognitive psychology, especially regarding human judgment and decision-making processes.