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Unformatted text preview: -term capital loss to deduct from net capital or Section 1231 gains. Choice "a" is incorrect. The rule for individual taxpayers (not corporate) allows for a $3,000 deduction against ordinary income. 67 © 2009 DeVry/Becker Educational Development Corp. All rights reserved. Maxixishere Pdf Collection Becker CPA Review, PassMaster Questions Lecture: Regulation 3 Choice "c" is incorrect. Corporations cannot deduct any capital losses against ordinary income. Choice "d" is incorrect. Corporate capital losses are limited to a 3-year carry back and 5-year carry forward period. CPA-04316 Type1 M/C 136. CPA-04316 A-R Corr Ans: P PII May 92 #5 (Adapted) 1 PM#42 R 3-99 Page 3 Following is Ral Corp.'s condensed income statement, before federal income tax, for the year ended December 31, 1993: Sales Cost of sales Gross profit Operating expenses Operating income Other income (loss): Interest Dividends Net long-term capital loss Income before federal income tax $1,000,000 (700,000) 300,000 (220,000) 80...
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