Orange Corporation was formed in 2011.In that year it had a net capital loss of $2,000.In 2012,it had a net capital gain of $5,000.In 2013,the company reported a net capital loss of $9,000.What is the amount of capital loss carryforward to 2014?

Question

Quizplus · Accepted Answer

The company can use the 2011 capital loss of $2,000 to offset the 2012 capital gain of $5,000, leaving $3,000 of capital gain for 2012. Then the company can use the remaining $3,000 of the 2011 loss to offset $3,000 of the 2013 capital loss, leaving a remaining $6,000 capital loss to carry forward to 2014. Therefore, the amount of capital loss carryforward to 2014 is $6,000.

Orange Corporation Was Formed in 2011