Question

Tatoo Inc. reported a net capital loss of $13,000 in 2018. The company had a net capital gain of $4,300 in 2016 and $3,000 in 2015. In 2017, although the company suffered a net operating loss, it had net capital gains of $1,000. What is the amount of Tatoo's capital loss carryover remaining after it applies the carryback?

A. $4,700.
B. $5,700.
C. $8,700.
D. $13,000.

Answer 1

The amount of Tatoo's capital loss carryover remaining after applying the carryback is $4,700.

Step-by-step explanation:

The amount of Tatoo's capital loss carryover remaining after it applies the carryback can be calculated by subtracting the net capital gains from the net capital losses over the years.

• Net capital loss in 2018: $13,000
• Net capital gain in 2016: $4,300
• Net capital gain in 2015: $3,000
• Net capital gain in 2017: $1,000 (even though there was a net operating loss)

Subtracting the net capital gains from the net capital losses, we get:

$13,000 - $4,300 - $3,000 - $1,000 = $4,700

So the amount of Tatoo's capital loss carryover remaining after it applies the carryback is $4,700.