In 2012, Bluebird Corporation Had Net Income from Operations of $75,000

question 16

Multiple Choice

In 2012, Bluebird Corporation had net income from operations of $75,000. Further, Bluebird recognized a long-term capital loss of $30,000, and a short-term capital gain of $10,000. Which of the following statements is correct?

• A)Bluebird Corporation may use the capital loss to offset the capital gain and must carry the net capital loss of $20,000 forward five years as a long-term capital loss.
• B)Bluebird Corporation may deduct $13,000 of the capital loss in 2012 and may carry forward the remainder of the capital loss indefinitely to offset capital gains.
• C)Bluebird Corporation will have taxable income in 2012 of $55,000.
• D)Bluebird Corporation will have taxable income in 2012 of $75,000 and will have a net capital loss of $20,000 that can be carried back 3 years and forward 5 years.
• E)None of the above.

---

Definitions:

Breast Cancer

A form of cancer that develops from breast tissue, signified by a lump in the breast or changes in breast shape.

Enlarged Lymph Nodes

An increase in size of the lymph nodes, which can be indicative of infection, inflammation, or malignancy.

Hypertensive Heart Disease

A range of heart disorders caused or complicated by high blood pressure, including coronary artery disease, heart failure, and hypertrophy of the heart muscle.

Thoracic Lymph Duct

The largest lymphatic vessel in the human body, running along the chest area and responsible for transporting lymph and its immune-related contents back into the bloodstream.