Unformatted text preview: ed to 10% of taxable income before the
dividends received deduction and the charitable contribution deduction. 10% ($410,000 + $20,000) =
$43,000. The deduction consists of $40,000 from the current year and $3,000 from the prior year
contribution carryover. That leaves a $2,000 carryover from 19X1 to 19X3. CPA-02151 Type1 M/C A-D Corr Ans: B PM#74 R 3-01 56. CPA-02151 PII May 93 #47 Page 19
When a corporation has an unused net capital loss that is carried back or carried forward to another tax
d. It retains its original identity as short-term or long-term.
It is treated as a short-term capital loss whether or not it was short-term when sustained.
It is treated as a long-term capital loss whether or not it was long-term when sustained.
It can be used to offset ordinary income up to the amount of the carryback or carryover. CPA-02151
Choice "b" is correct.
Rule: Unused capital losses of a corporation that are carried back or forward are treated as short-term
capital losses whether or not they were short-te...
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