In 2017,Bluebird Corporation Had Net Income from Operations of $100,000

question 47

Multiple Choice

In 2017,Bluebird Corporation had net income from operations of $100,000.Further,Bluebird recognized a long-term capital gain of $30,000,and a short-term capital loss of $45,000.Which of the following statements is correct?

• A)Bluebird Corporation will have taxable income in 2017 of $100,000 and will have a net capital loss of $15,000 that can be carried back 3 years and forward 5 years.
• B)Bluebird Corporation may use the capital loss to offset the capital gain and must carry the net capital loss of $15,000 forward five years as a short-term capital loss.
• C)Bluebird Corporation may deduct $33,000 of the capital loss in 2017 and may carry forward the remainder of the capital loss indefinitely to offset capital gains.
• D)Bluebird Corporation will have taxable income in 2017 of $85,000.
• E)None of the above.

---

Definitions:

Income Effect

The alteration in the income of a person or an economy and its impact on the demand for a particular good or service.

Leisure

The time available for ease and relaxation where no work is done, often considered as time spent away from business, work, job hunting, domestic chores, and education.

Workers' Incomes

The financial compensation received by employees for their labor, including wages, salaries, and bonuses.

Labor Supplied

The total hours of work that workers are willing to offer at a given wage rate.