Billingsworth Corporation Has the Following Net Capital Gains and Losses

question 87

Multiple Choice

Billingsworth Corporation has the following net capital gains and losses for 2009 through 2012.Billingsworth' marginal tax rate is 34% for all years.

$\begin{array}{llll} \underline { 2009 } & \underline{ 2010 }& \underline{ 2011 }& \underline{ 2012 }\\\$ 8,000 & \$ 3,000 & \$ 6,500 & \$(9,000) \end{array}$
In 2013,Billingsworth Corporation earned net operating income of $30,000.What is/are the tax effect(s) of the $9,000 net capital loss in 2012?
I.Corporate taxable income is $21,000.
II.The net capital loss will provide income tax refunds totaling $3,060.

• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

1970

A year marked by significant global and national events, considered part of the late 20th century historical context.

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Households in which both partners earn income from employment, becoming increasingly common in modern societies.

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An employee benefit that provides paid time off work to care for a family member or for childbirth or adoption.

Work Week

The standard period of time during which work is done, usually defined as Monday through Friday, totaling approximately 40 hours in many countries.