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11 July, 08:10

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?

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  1. 11 July, 09:46
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    =$3700

    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
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