ACTG 3120 Chapter Notes - Chapter 17: Tax Avoidance, Arrack, Deferred Tax
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Problem 17-37 (LO. 2)
During 2017, Gorilla Corporation has net short-term capitalgains of $15,000, net long-term capital losses of $105,000, andtaxable income from other sources of $460,000. Prior years'transactions included the following:
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If an amount is zero, enter "0".
a. How much is Gorilla's net capital loss for2017?
$
What is the amount of the capital loss deduction on Gorilla's2017 tax return?
$
Any excess net capital loss is carried back or forward as a.
b. Of the excess 2017 net capital loss, howmuch is carried back to the previous years?
$
c. Compute the amount of capital loss carryoverto 2018 and future years.
$
Indicate the years to which the loss may be carried. Select"Yes" or "No", which ever is appropriate.
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d. If Gorilla is a sole proprietorship, ratherthan a corporation, how would the owner report these transactionson her 2017 tax return?
Gorilla offsets $ of capital gains against her losses and anadditional $ in capital . The remaining $ is .
e. Assume that Gorilla Corporationâs capitalloss carryfoward in part (c) is $27,000 and that Gorilla will beable to use $11,000 of the carryover to offset capital gains in2018 and the remaining $16,000 to offset capital gains in 2019.
Assume the following:
A discount rate of 5%.
Present value factors - 1.000 for 2014-2016; 0.952 for 2018 and0.907 for 2020.
Gorilla Corporationâs marginal income tax rate is 34% for alltax years.
Round your computations to the nearest dollar.
In present value terms, determine the tax savings of the$105,000 long-term capital loss recognized in 2017.
$
Which of the following statements is correct with regard tobusiness tax calculation?
When determining a corporationâs taxable income, all of theexpense items are 100% deductible. | ||
Net operating losses can be carried back to the past three yearsand carried forward to the next 15 years. | ||
Alternative Minimum Tax system applies to small companies andlow-income taxpayers. | ||
Dividend and long-term capital gains usually are levied at aflat tax rate which is comparatively high. |