Tatoo Incorporated reported a net capital loss of $14,900 in 2020. The company had a net capital gain of $6,200 in 2018 and $4,900 in 2017. In 2019, although the company suffered a net operating loss, it had net capital gains of $2,900. What is the amount of Tatoo's capital loss carryover to 2021 remaining after it applies the carryback?
A) $900.
B) $3,800.
C) $8,700.
D) $14,900.

Question

Quizplus · Accepted Answer

The net capital loss of $14,900 from 2020 can be carried back to offset the net capital gains from the previous three years. First, it offsets the $2,900 gain in 2019, then the $6,200 gain in 2018, and finally the $4,900 gain in 2017. After offsetting these gains, $3,800 of the loss remains to be carried forward to 2021.

Tatoo Incorporated Reported a Net Capital Loss of $14,900 in 2020