ABC.Ltd.had unused allowable capital losses of $20,000 during the current fiscal year and an unused business loss of $10,000.Which of the following statements is true?

Question

Quizplus · Accepted Answer

The unused allowable capital loss will be converted to a net-capital loss and can be carried back 3 years and forward indefinitely, while the unused business loss will be converted to a non-capital loss and can be carried back 3 years and forward twenty years. Therefore, option B is correct. Option A is incorrect because losses can be carried forward or backward for future use. Option C is incorrect because the conversion of losses is the opposite of what is stated. Option D is incorrect because it only applies to the business loss and not the allowable capital loss.

ABCLtdHad Unused Allowable Capital Losses of $20,000 During the Current