Pure action cycles inc., a bicycle manufacturer, has a net capital loss in 2018 of $(70,000). it had net capital gains of $22,100 in 2017, $48,000 in 2016, $10,600 in 2015 (but suffered a net operating loss in 2015), and $8,600 of net capital gain in 2014. what is the net capital gain in 2017 after the carryback is applied?

Remaining capital gain in 2017 is $100

Explanation:

given data

net capital loss in 2018 = $70,000

net capital gains in 2017 = $22,100

net capital gains in 2016 = $48,000

net capital gains in 2015 = $10,600

net capital gains in 2014 = $8,600

to find out

net capital gain in 2017

solution

we know that here that the net capital loss can only be carried back three years

so It cannot be applied to the net capital gain in 2016 either because the corporation suffered a net operating loss that year

so here we have given  

Net capital gain offset in 2016 is $48,000

so Remaining capital loss carry back is = net capital loss in 2018 - Net capital gain offset in 2016

Remaining capital loss carry back is = 70,000 - 48,000 = $22000

so

here net capital gain in 2017 is $22,100

Remaining capital gain in 2017 = net capital gain in 2017 - Remaining capital loss carry back 2016

Remaining capital gain in 2017 = 22,100 - 22000

Remaining capital gain in 2017 is $100

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