Explore BrainMass

Explore BrainMass

    Sole Proprietorship and C Corporation

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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?

    © BrainMass Inc. brainmass.com June 3, 2020, 8:26 pm ad1c9bdddf
    https://brainmass.com/business/accounting/sole-proprietorship-corporation-138122

    Solution Preview

    Lucille -Sole Proprietorship
    A 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 ...

    Solution Summary

    This solution calculates how losses affect taxable income for Lucille and Mabel. Additionally, two references are provided for further research on the subject.

    $2.19

    ADVERTISEMENT