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.

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Definitions:

Multiple Source

The practice of procuring a good or service from several suppliers to reduce dependency on any single supplier and increase competitiveness.

Cross-functional Teams

Groups composed of members from different departments or expertise areas working together towards a common goal.

Research

The systematic investigation into and study of materials and sources to establish facts and reach new conclusions.

Autonomy

The ability or right of an individual or entity to make their own decisions independently, free from external control or influence.