Canary Corporation, which sustained a $5,000 net short-term capital loss during the year, will enter $5,000 as an addition on Schedule M-1 of Form 1120.

Question

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Schedule M-1 of Form 1120 is used to reconcile the income (loss) per books with the income (loss) per tax return, and a net short-term capital loss would be added back to book income to reconcile to taxable income.

Canary Corporation, Which Sustained a $5,000 Net Short-Term Capital Loss