During 2019, Dowdy, a C corporation, realized a long-term capital gain of $8,000 from the sale of a tract of land, a short-term capital gain of $6,000 from the sale of stock of Ornery Corporation, and a long-term capital loss of $18,000 from the sale of U. S. government securities. What amount of the long-term capital loss may Dowdy deduct on its 2019 income tax return?

Question

Krish White

Business

10 January, 07:07

During 2019, Dowdy, a C corporation, realized a long-term capital gain of $8,000 from the sale of a tract of land, a short-term capital gain of $6,000 from the sale of stock of Ornery Corporation, and a long-term capital loss of $18,000 from the sale of U. S. government securities. What amount of the long-term capital loss may Dowdy deduct on its 2019 income tax return?

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Answers (1)

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Dawson Buckley · Answer 1

The answer to the following question is $4000.

Explanation:

Dowdy which is a C corporation, has a total of $14,000 in capital gain, in which $8000 comes from sale of tract land and rest of $6000 comes from sale of stock. And the company also has a capital loss of $18,000. So here the company is having a long term capital loss of $4000 ($18,000 - $14,000), and this C corporation can deduct this long term capital loss from their taxable income (the year in which loss was incurred). If in a situation, loss is not deducted from this year, then it can be carried 3 years or 2 years or even 1 years back and if there is capital gain, it can be deducted from it.