Question

Calculator Carrot Corporation, a corporation, as amet short term capital gain f $65.000 and a net long-term capital loss of $250.000 during 2019. Carrot Corporation had taxable income from other sources of $720,000. Prior years transactions induded the following: 2015 2016 Net long-term capital gain Net short term capital gain Net short-term captalgan Net long-term capital gain $150,000 60,000 45,000 2012 2018 Compute the amount of Carret's capital loss carryover to 2020. a. $32,000 b. 50 c. $45,000 8. $185.000 Ge. None of these choices are correct e8

Answer 1

Net Short Term Capital gain as of 2019	$65,000
Less: Net Long-Term Capital Loss as of 2019	($250,000)
Net Capital Loss as of 2019	($185,000)
The Net Capital Loss of $185,000 is not deductible in the year 2019 but applies to the three preceding years of 2016,2017 and 2018
Net Short Term Capital Gain - 2016	$60,000
Net Short Term Capital Gain - 2017	$45,000
Net Long Term Capital Gain - 2018	$35,000
Total Capital Offset	$140,000
Amount of Capital Loss Carryover to 2020 of Carrot Corporation	Net Capital Loss as on 2019 - Total Capital Offset = $(185,000 – 140,000) = $45,000 Ans.

The Correct Option is Option C = $45,000