For Corporations, Which of the Following Regarding Net Capital Losses

question 98

Multiple Choice

For corporations, which of the following regarding net capital losses is true?

• A)A corporation that experiences a net capital loss has a favorable book-tax difference in the year of the loss.
• B)A corporation that experiences a net capital loss in year 4 first carries the loss back to year 3, then year 2, and then year 1 before carrying it forward.
• C)Net capital loss carrybacks are deductible in determining a corporation's net operating loss.
• D)Net capital loss carrybacks and carryovers create temporary book-tax differences if they are used before they expirE.Net capital losses create an unfavorable book-tax difference in the year they occur and a favorable book-tax difference in the year they are applied.These book-tax differences are temporary.

---

Definitions:

MPS

Master Production Schedule, a plan for the production of individual final items that breaks down the aggregate plan.

Aggregate Plan

A planning strategy that outlines the overall production activities of a company over a certain period of time to meet forecasted demand.

Master Production Schedule

A detailed plan that outlines exactly what is to be produced, in what quantities, and when, serving as a critical component in manufacturing and supply chain management.