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In tax year 2008, Sun Corporation had a $10,000 long-term capital loss and a $5,000 shortterm capital gain. In tax year 2004, Sun Corporation reported $1,000 in long-term capital gains and $4,000 in short-term capital gains. Sun Corporation reported no other capital gains or losses in any other tax year. How much net capital loss will be available for Sun Corporation to carry into tax year 2009?
a. $0
b. $1,000
c. $4,000
d. $5,000
Solution: The correct choice is "d."
As is true for individual taxpayers, a corporation's capital gains and losses arise from the sale or exchange of capital assets or from other gains and losses that qualify for capital asset treatment such as Section 1231 transactions. In addition, the definition of a capital asset and the definitions...