Asked by abdulbaset charsi on Jun 25, 2024
Verified
Which of the following statements is correct?
A) If a corporation has a net operating loss,it can carry the loss back three years and then forward twenty years.
B) A net capital loss can be carried back three years and then forward five years.
C) The first estimated payment of a corporation is due on the 15th day of the third month of the fiscal year.
D) A corporation is entitled to a charitable deduction of 10% of its gross income before certain items.
Net Operating Loss
A situation in which a company's allowable tax deductions are greater than its taxable income within a tax period, leading to a negative taxable income.
Charitable Deduction
A tax deduction given for donations made to qualifying charitable organizations.
Estimated Payment
Payments made to cover taxes on income not subject to withholding, like earnings from self-employment, often paid quarterly to avoid underpayment penalties.
- Master the crucial components of Adjusted Gross Income calculations and understand their implications on the taxation of corporations.
- Acquire understanding of the protocols and procedures for dealing with net capital losses in corporate entities.
Verified Answer
ZK
Zybrea KnightJul 01, 2024
Final Answer :
B
Explanation :
According to the tax laws, a net capital loss can be carried back three years and then forward five years. This means that if a corporation incurs a loss due to the sale of capital assets, it can offset taxes on gains made in the previous three years and also carry forward any unused losses for the next five years.
Option A is incorrect. A net operating loss can be carried back two years and forward twenty years according to the current tax laws.
Option C is also incorrect. The first estimated payment of a corporation is due on the 15th day of the fourth, sixth, ninth, and twelfth months of the fiscal year.
Option D is incorrect. A corporation is entitled to a charitable deduction of up to 10% of its taxable income rather than gross income before certain items.
Option A is incorrect. A net operating loss can be carried back two years and forward twenty years according to the current tax laws.
Option C is also incorrect. The first estimated payment of a corporation is due on the 15th day of the fourth, sixth, ninth, and twelfth months of the fiscal year.
Option D is incorrect. A corporation is entitled to a charitable deduction of up to 10% of its taxable income rather than gross income before certain items.
Learning Objectives
- Master the crucial components of Adjusted Gross Income calculations and understand their implications on the taxation of corporations.
- Acquire understanding of the protocols and procedures for dealing with net capital losses in corporate entities.