During 2020, Gorilla Corporation, a calendar year C corporation, has net short-term capital gains of $15,000, net long-term capital losses of $105,000, and taxable income from other sources of $460,000. Prior years’ transactions included the following:2016 net short-term capital gains$40,0002017 net long-term capital gains18,0002018 net short-term capital gains25,0002019 net long-term capital gains20,000How are the capital gains and losses treated on Gorilla’s 2020 tax return?Determine the amount of the 2020 capital loss that is carried back to each of the previous years.Compute the amount of capital loss carryforward, if any, and indicate the years to which the loss may be carried.If Gorilla is a sole proprietorship rather than a corporation, how would the owner report these transactions on her 2020 tax return?Assume that Gorilla Corporation’s capital loss carryfoward in part (c) is $27,000 and that Gorilla will be able to use $11,000 of the carryover to offset capital gains in 2021 and the remaining $16,000 to offset capital gains in 2022. In present value terms, determine the tax savings of the $105,000 long-term capital loss recognized in 2020. Assume a discount rate of 5% (present value factors are in Appendix G). Further, assume that Gorilla Corporation’s marginal income tax rate is 34% for all tax years prior to 2018. Create a spreadsheet using Microsoft Excel (or a similar software program) that summarizes your analysis. <35. LO.1 During 2020, Gorilla Corporation, a calendar year C corporation,has net short-term capital gains of $15,000, net long-term capital losses of$105,000, and taxable income from other sources of $460,000. Prior years'transactions included the following:Critical Thinking$40,0002016 net short-term capital gains2017 net long-term capital gains18,0002018 net short-term capital gains25,0002019 net long-term capital gains20,000a. How are the capital gains and losses treated on Gorilla's 2020 tax return?b. Determine the amount of the 2020 capital loss that is carried back to each of the previous years.c. Compute the amount of capital loss carryforward, if any, and indicate the years to which the lossmay be carried.d. If Gorilla is a sole proprietorship rather than a corporation, how would the owner report thesetransactions on her 2020 tax return?e. Assume that Gorilla Corporation's capital loss carryfoward in part (c) is $27,000 and that Gorillawill be able to use $11,000 of the carryover to offset capital gains in 2021 and the remaining$16,000 to offset capital gains in 2022. In present value terms, determine the tax savings of the$105,000 long-term capital loss recognized in 2020. Assume a discount rate of 5% (present valuefactors are in Appendix G). Further, assume that Gorilla Corporation's marginal income tax rate is34% for all tax years prior to 2018. Create a spreadsheet using Microsoft Excel (or a similar

The profit made when a person or organisation sells a capital asset for more than it was originally…

During 2020, Gorilla Corporation, a calendar year C corporation, has net short-term capital gains of $15,000, net long-term capital losses of $105,000, and taxable income from other sources of $460,000. Prior years’ transactions included the following: 2016 net short-term capital gains $40,000 2017 net long-term capital gains 18,000 2018 net short-term capital gains 25,000 2019 net long-term capital gains 20,000 How are the capital gains and losses treated on Gorilla’s 2020 tax return? Determine the amount of the 2020 capital loss that is carried back to each of the previous years. Compute the amount of capital loss carryforward, if any, and indicate the years to which the loss may be carried. If Gorilla is a sole proprietorship rather than a corporation, how would the owner report these transactions on her 2020 tax return? Assume that Gorilla Corporation’s capital loss carryfoward in part (c) is $27,000 and that Gorilla will be able to use $11,000 of the carryover to offset capital gains in 2021 and the remaining $16,000 to offset capital gains in 2022. In present value terms, determine the tax savings of the $105,000 long-term capital loss recognized in 2020. Assume a discount rate of 5% (present value factors are in Appendix G). Further, assume that Gorilla Corporation’s marginal income tax rate is 34% for all tax years prior to 2018. Create a spreadsheet using Microsoft Excel (or a similar software program) that summarizes your analysis.

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter2: Financial Statements, Cash Flow,and Taxes

Section: Chapter Questions

Problem 21SP: Begin with the partial model in the file Ch02 P21 Build a Model.xlsx on the textbooks Web site. a....

See similar textbooks

Related questions

Question

During 2020, Gorilla Corporation, a calendar year C corporation, has net short-term capital gains of $15,000, net long-term capital losses of $105,000, and taxable income from other sources of $460,000. Prior years’ transactions included the following:

2016 net short-term capital gains	$40,000
2017 net long-term capital gains	18,000
2018 net short-term capital gains	25,000
2019 net long-term capital gains	20,000

How are the capital gains and losses treated on Gorilla’s 2020 tax return?
Determine the amount of the 2020 capital loss that is carried back to each of the previous years.
Compute the amount of capital loss carryforward, if any, and indicate the years to which the loss may be carried.
If Gorilla is a sole proprietorship rather than a corporation, how would the owner report these transactions on her 2020 tax return?
Assume that Gorilla Corporation’s capital loss carryfoward in part (c) is $27,000 and that Gorilla will be able to use $11,000 of the carryover to offset capital gains in 2021 and the remaining $16,000 to offset capital gains in 2022. In present value terms, determine the tax savings of the $105,000 long-term capital loss recognized in 2020. Assume a discount rate of 5% (present value factors are in Appendix G). Further, assume that Gorilla Corporation’s marginal income tax rate is 34% for all tax years prior to 2018. Create a spreadsheet using Microsoft Excel (or a similar software program) that summarizes your analysis.

<
35. LO.1 During 2020, Gorilla Corporation, a calendar year C corporation,
has net short-term capital gains of $15,000, net long-term capital losses of
$105,000, and taxable income from other sources of $460,000. Prior years'
transactions included the following:
Critical Thinking
$40,000
2016 net short-term capital gains
2017 net long-term capital gains
18,000
2018 net short-term capital gains
25,000
2019 net long-term capital gains
20,000
a. How are the capital gains and losses treated on Gorilla's 2020 tax return?
b. Determine the amount of the 2020 capital loss that is carried back to each of the previous years.
c. Compute the amount of capital loss carryforward, if any, and indicate the years to which the loss
may be carried.
d. If Gorilla is a sole proprietorship rather than a corporation, how would the owner report these
transactions on her 2020 tax return?
e. Assume that Gorilla Corporation's capital loss carryfoward in part (c) is $27,000 and that Gorilla
will be able to use $11,000 of the carryover to offset capital gains in 2021 and the remaining
$16,000 to offset capital gains in 2022. In present value terms, determine the tax savings of the
$105,000 long-term capital loss recognized in 2020. Assume a discount rate of 5% (present value
factors are in Appendix G). Further, assume that Gorilla Corporation's marginal income tax rate is
34% for all tax years prior to 2018. Create a spreadsheet using Microsoft Excel (or a similar

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 5 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.