For its first four years of operation, Corporation Y reported the following taxable income:In 2016, 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 2016. 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 2013 and 2014 and receive a tax refund. Which course of action do you recommend and why?

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2012 2013 2014 2015 $ 6,000 Ordinary income Net capital gain Taxable income $150,000 4,000 $154,000 $12,000 $600,000 -0- 19,000 $25,000 -0- $12,000 $600,000