Phi Corporation had the following capital gains and losses for 2016 through 2018:
?
$$\begin{array} { c c c }
2016 & 2017 & 2018 \
\$ 15,000 & \$ ( 40,000 ) & \$ 10,000
\end{array}$$
I.Phi can deduct a loss of $\$ 15,000$ in 2018 .
II.Phi will carry forward a $\$ 15,000$ capital loss to 2019 .

Question

Phi Corporation had the following capital gains and losses for 2016 through 2018:
?
$$\begin{array} { c c c } 
2016 & 2017 & 2018 \
\$ 15,000 & \$ ( 40,000 ) & \$ 10,000
\end{array}$$
I.Phi can deduct a loss of $\$ 15,000$ in 2018 .
II.Phi will carry forward a $\$ 15,000$ capital loss to 2019 .

Quizplus · Accepted Answer

Phi Corporation can carry forward the net capital loss of $15,000 ($15,000 gain in 2016 - $40,000 loss in 2017 + $10,000 gain in 2018) to 2019. Corporations can carry forward capital losses indefinitely to offset future capital gains. Statement I is incorrect because the net loss of $15,000 is not deducted in 2018 but carried forward.

Phi Corporation Had the Following Capital Gains and Losses for 2016