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    Sole Proprietorship and C Corporation

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    Shelley Lewis-Peters
    Lucille, as a sole proprietor, can deduct her $20,000 business loss against her other business income over the next 7 years. She can deduct $3,000 per year of her $7,000 capital loss over the next 5 years. Mabel, as the sole shareholder of a C corporation, can carry forward her $20,000 business loss to reduce the corporation's pre-tax profits over the next 7 years. She can deduct $3,000 per year of her $7,000 capital loss over the next 5 years.

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    Sole Proprietorship and C Corporation

    Uploaded by

    Shelley Lewis-Peters
    17 views1 page
    Lucille, as a sole proprietor, can deduct her $20,000 business loss against her other business income over the next 7 years. She can deduct $3,000 per year of her $7,000 capital loss over the next 5 years. Mabel, as the sole shareholder of a C corporation, can carry forward her $20,000 business loss to reduce the corporation's pre-tax profits over the next 7 years. She can deduct $3,000 per year of her $7,000 capital loss over the next 5 years.

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    Lucille, as a sole proprietor, can deduct her $20,000 business loss against her other business income over the next 7 years. She can deduct $3,000 per year of her $7,000 capital loss over the next 5 years. Mabel, as the sole shareholder of a C corporation, can carry forward her $20,000 business loss to reduce the corporation's pre-tax profits over the next 7 years. She can deduct $3,000 per year of her $7,000 capital loss over the next 5 years.

    Copyright:

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    Download as DOCX, PDF, TXT or read online from Scribd
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    17 views1 page

    Sole Proprietorship and C Corporation

    Uploaded by

    Shelley Lewis-Peters
    Lucille, as a sole proprietor, can deduct her $20,000 business loss against her other business income over the next 7 years. She can deduct $3,000 per year of her $7,000 capital loss over the next 5 years. Mabel, as the sole shareholder of a C corporation, can carry forward her $20,000 business loss to reduce the corporation's pre-tax profits over the next 7 years. She can deduct $3,000 per year of her $7,000 capital loss over the next 5 years.

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    Sole Proprietorship and C Corporation 2. Lucille owns a sole proprietorship and Mabel is the sole shareholder of a C corporation.

    Each business sustained a $ 20,000 loss and a $ 7,000 capital loss for the year. How will these losses affect the taxable income of the two owners when they file their individual income tax returns?

    Created: Jul 19, 2007 12:31 am Solution By OTA: 105788, Vishal Midha, PhD

    Solutiongo to problem Lucille -Sole Proprietorship Business Loss of $20k can be carried forward up to seven years and can be adjusted for Business Income. So, $7k Capital loss can be adjusted against the capital gain, OR She can carry forward the amount and deduct $3k every year (up to 5 years). Mabel, Sole Shareholder of C Corp. Business Loss of $20k can be carried forward up to seven years and adjusted in pre tax profit. So, $7k Capital loss can be adjusted against the capital gain, OR She can carry forward the amount (up to 5 years). Explanation from the book: A tax loss carry forward, on the other hand, is an operating loss charged against income in future years. Generally accepted accounting principles (GAAP) specify that loss carry forwards can be used in any one of the seven years following the loss. A taxpayer's short-term capital gains and losses are merged; the net is then merged with net longterm capital gains. http://www.answers.com/topic/loss-carryforward?cat=biz-fin

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