Tatoo Incorporated Reported a Net Capital Loss of $13,000 in 2020

question 102

Multiple Choice

Tatoo Incorporated reported a net capital loss of $13,000 in 2020. The company had a net capital gain of $4,300 in 2018 and $3,000 in 2017. In 2019, although the company suffered a net operating loss, it had net capital gains of $1,000. What is the amount of Tatoo's capital loss carryover to 2021 remaining after it applies the carryback?

• A)$4,700.
• B)$5,700.
• C)$8,700.
• D)$13,000.

---

Definitions:

Limited Liability Company (LLC)

A corporate format that unites the direct taxation system of sole proprietorships or partnerships with the advantage of limited legal responsibility typical of corporations.

Authorized to Issue

Having the official power or permission to give out or distribute something, such as shares or licenses.

Franchisor

A business entity that grants a license to an individual or group enabling them to operate a business under the franchisor's trademark, name, and business model.

Negligently

Acting with a lack of care or attention expected under the circumstances, often resulting in harm or damage.