Dallas Corporation, Not a Dealer in Securities, Realizes Taxable Income

question 62

Multiple Choice

Dallas Corporation, not a dealer in securities, realizes taxable income of $60,000 from the operation of its business. Additionally, in the same year, Dallas realizes a long-term capital loss of $10,000 from the sale of marketable securities. If the corporation realizes no other capital gains or losses, what is the proper treatment for the $10,000 long-term capital loss on the tax return?

• A)Use $3,000 of the loss to reduce taxable income and carry $7,000 of the long-term capital loss forward for five years.
• B)Use $6,000 of the loss to reduce taxable income and carry $4,000 of the long-term capital loss forward for five years.
• C)Use $10,000 of the long-term capital loss to reduce taxable income.
• D)Carry the $10,000 long-term capital loss back three years as a short-term capital loss, then forward five years.

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Definitions:

Cultures

The shared values, norms, languages, customs, and practices of groups of people that shape their social behavior and perspectives.

Complex

A related group of emotionally charged ideas, memories, and impulses that are deeply rooted in the unconscious mind.

Difficult to Grasp

Describes concepts, objects, or ideas that are not easily understood or comprehended.

Openness

A personality trait that features qualities like intellectual curiosity, creativity, preference for novelty, and a wide range of interests.