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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