Which of the following comparisons is correct?
A)Both individual and corporate long-term capital losses carryover as short-term capital losses.
B)Individuals may only carry forward capital losses for five years; corporations may carry forward capital losses indefinitely;
C)Both individuals and corporations may use the 15% tax rate on net capital gains.
D)Corporations may carry back capital losses; individuals may not.

Question

Quizplus · Accepted Answer

Corporations have the ability to carry back capital losses to offset prior years' income, a provision not available to individual taxpayers. This allows corporations to amend past tax returns to reflect the capital loss and potentially receive a refund for taxes paid in those years. Individuals, on the other hand, can only carry forward capital losses to offset future capital gains and up to $3,000 of other income annually.

Which of the Following Comparisons Is Correct