Question

Tatoo Inc. reported a net capital loss of $15,000 in 2019. The company had a net capital gain of $6,300 in 2017 and $5,000 in 2016. In 2018, although the company suffered a net operating loss, it had net capital gains of $3,000. What is the amount of Tatoo's capital loss carryover remaining after it applies the carryback?

Answer 1

=$3700

Step-by-step explanation:

Given

2019 net capital loss = $15,000

2017 net capital gain = $6,300

2016 net capital gain = $5,000

The net capital loss is first carried back to 2016 as $5,000 and deducted against net capital gain. The 2017 net capital gain of $6,300 is offset next. There will be no carryback in 2018 because Tatoo Inc. Realized a net operating loss

Therefore the remaining capital loss carryover = 2019 net capital loss - 2016 net capital gain - 2017 net capital gain

= $15,000 -$5,000 - $6,300

=$3700