Silver, Incorporated was incorporated in 2019 and adopted a calendar year for tax purposes. Here is a schedule of Silver's taxable income for 2019 and 2020. 2019 2020 Ordinary income $100,000 $150,000 Net capital gain 5,000 Taxable income $100,000 $155,000 In 2021, Silver generated $300,000 ordinary income and recognized a $15,000 net capital loss. Assuming a 21% corporate tax rate, which of the following statements is CORRECT? Silver can deduct its $15,000 net capital loss only on a carryforward basis. O Silver can carry the $15,000 net capital loss back to 2020 and receive a $3,150 refund. Silver can deduct $3,000 of the $15,000 capital loss against its 2021 ordinary income and receive a $630 tax savings. O Silver can carry $5,000 of the $15,000 net capital loss back to 2020 and receive a $1,050 refund.
Silver, Incorporated was incorporated in 2019 and adopted a calendar year for tax purposes. Here is a schedule of Silver's taxable income for 2019 and 2020. 2019 2020 Ordinary income $100,000 $150,000 Net capital gain 5,000 Taxable income $100,000 $155,000 In 2021, Silver generated $300,000 ordinary income and recognized a $15,000 net capital loss. Assuming a 21% corporate tax rate, which of the following statements is CORRECT? Silver can deduct its $15,000 net capital loss only on a carryforward basis. O Silver can carry the $15,000 net capital loss back to 2020 and receive a $3,150 refund. Silver can deduct $3,000 of the $15,000 capital loss against its 2021 ordinary income and receive a $630 tax savings. O Silver can carry $5,000 of the $15,000 net capital loss back to 2020 and receive a $1,050 refund.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter16: Multijurisdictional Taxation
Section: Chapter Questions
Problem 40P
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Transcribed Image Text:Silver, Incorporated was incorporated in 2019 and adopted a calendar
year for tax purposes. Here is a schedule of Silver's taxable income for
2019 and 2020.
2019
2020
Ordinary income $100,000 $150,000
Net capital gain
0 5,000
Taxable income $100,000 $155,000
In 2021, Silver generated $300,000 ordinary income and recognized a
$15,000 net capital loss. Assuming a 21% corporate tax rate, which of the
following statements is CORRECT?
Silver can deduct its $15,000 net capital loss only on a carryforward basis.
Silver can carry the $15,000 net capital loss back to 2020 and receive a $3,150
refund.
Silver can deduct $3,000 of the $15,000 capital loss against its 2021 ordinary
income and receive a $630 tax savings.
Silver can carry $5,000 of the $15,000 net capital loss back to 2020 and
receive a $1,050 refund.
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