For its first four years of operation, Corporation Y reported the following taxable income:
In 2015, Corporation Y generated $900,000 ordinary income and recognized a $20,000 loss on the sale of a capital asset. It is considering selling a second capital asset before the close of 2015. This sale would generate a $21,000 capital gain that would allow the corporation to deduct its entire capital loss. Alternatively, it could carry its $20,000 net capital loss back to 2012 and 2013 and receive a tax refund. Which course of action do you recommend and why?
Answer to relevant QuestionsOlno Inc. has a $52,100 capital loss carryforward into its current taxable year that will expire at the end of the year. During the year, Olno realized a $141,900 capital gain on sale of land. The purchaser paid 10 percent ...When a taxpayer transfers appreciated property to a corporation in exchange for newly issued stock and the exchange is nontaxable, the gain deferred on the exchange actually doubles. Can you explain this? Firm PO and Corporation QR exchanged the following business real estate: a. If PO’s adjusted basis in Marvin Gardens was $403,000, compute PO’s realized gain, recognized gain, and basis in Boardwalk. b. If QR’s ...Mr. Boyd and Ms. Tuck decide to form a new corporation named BT Inc. Mr. Boyd transfers $10,000 cash and business inventory ($20,000 FMV; adjusted tax basis $3,200), and Ms. Tuck transfers business equipment (FMV $60,000; ...Rufus Inc. and Hardy Company are negotiating a nontaxable exchange of business properties. Rufus’s property has a $50,000 tax basis and a $77,500 FMV. Hardy’s property has a $60,000 tax basis and a $90,000 FMV. a. Which ...
Post your question