In 2019, Bluebird Corporation Had Net Income from Operations of $100,000

question 81

Multiple Choice

In 2019, 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 2019 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 2019 and may carry forward the remainder of the capital loss indefinitely to offset capital gains.
• D) Bluebird Corporation will have taxable income in 2019 of $85,000.
• E) None of these.

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