Maize Corporation had $100,000 operating income and $40,000 operating expenses during the year.In addition,Maize had a $3,000 long-term capital gain and a $5,000 short-term capital loss.Compute Maize's taxable income for the year.
A)$60,000.
B)$108,000.
C)$109,000.
D)$111,000.
E)None of the above.

Question

Quizplus · Accepted Answer

$100,000 operating income - $40,000 operating expenses + $3,000 LTCG - $3,000 STCL = $60,000 taxable income.The net capital loss of $2,000 ($3,000 LTCG - $5,000 STCL)cannot be deducted in the year incurred,but can be carried back 3 years and forward five years.

Maize Corporation Had $100,000 Operating Income and $40,000 Operating Expenses