In 2015, Nam Corp., which is not a dealer in securities, realized taxable income of $160,000 from its business operations. Also, in 2015, Nam sustained a long-term capital loss of $24,000 from the sale of marketable securities. Nam did not realize any other capital gains or losses since it began operations. In Nam's income tax returns, what is the proper treatment for the $24,000 long-term capital loss?
a. Use $3,000 of the loss to reduce 2015 taxable income, and carry $21,000 of the long-term capital loss forwards for five years.
b. Use $6,000 of the loss to reduce 2015 taxable income by $3,000, and carry $18,000 of the long-term capital loss forward for five years.
c. Use $24,000 of the long-term capital loss to reduce 2015 taxable income by $12,000.
d. Carry the $24,000 long-term capital loss forward for five years, treating it as a short-term capital loss.
Answer: D
Tax
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