Modern Ltd. had an unused allowable capital loss of $20,000 during the current fiscal year and an unused business loss of $10,000. Modern Ltd. has a December 31 year-end. Which of the following statements is correct?

a. All the losses will be lost if not used in this fiscal year.
b. The unused allowable capital loss will become a net-capital loss and can be carried back three years and forward indefinitely, and the unused business loss will become a non-capital loss and can be carried back three years and forward twenty years.
c. The unused business loss will become a net-capital loss and can be carried back three years and forward indefinitely, and the unused allowable capital loss will become a non-capital loss and can be carried back three years and forward twenty years.
d. The unused business loss will become a non-capital loss and can be carried back three years and forward indefinitely.

Answer rating: 100% (QA)

OPTION C The unused business loss will become a net capital loss and ... View the full answer