Orange Corporation was formed in 2013. In that year it had a net capital loss of $2,000. In 2014, it had a net capital gain of $5,000. In 2015, the company reported a net capital loss of $9,000. What is the amount of capital loss carryforward to 2016, if any?

Question

Quizplus · Accepted Answer

The net capital gain in 2014 of $5,000 can be used to offset the net capital loss of $2,000 in 2013, leaving a remaining net capital gain of $3,000. Then, in 2015, the remaining net capital gain of $3,000 can be used to offset $3,000 of the net capital loss of $9,000, leaving a remaining net capital loss of $6,000. This $6,000 can be carried forward to 2016 as a capital loss carryforward.

Orange Corporation Was Formed in 2013