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:

Nonwhites

A term used to describe individuals not classified as white, often used in the context of discussing racial and ethnic diversity and disparities.

Solid South

A term historically used to describe the domination of the Democratic Party in the southern United States, particularly from the post-Civil War era until the mid-20th century.

New Deal

A series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the 1930s to help the United States recover from the Great Depression.

Welfare State

A social system in which the government assumes primary responsibility for the welfare of its citizens by providing services such as healthcare, education, and financial support.