Capital gain net Loss Carry Forward

Forum|Forum|3 years ago
May 8, 2022
1 reply
0 views

A corporation bought its first property, a vacant lot (#1) in 2015 for $200K, and vacant lot #2 in 2018 for $500K. These properties don't generate any income; therefore, as of 2020, the corporation has $120K in retained earnings (combined loss from these 2 properties).

On 1/1/ 2021, vacant lot #2 was sold for $620K.

Lot #2 sales price $620K - $500K purchase price = $120K gain from sales of lot #2

Can the gain from sales of lot #2 (120K) be net off with loss carry forward ($120K) so that the corporation has no capital gain in 2021?

Not A Product Question

Mike9241

we don't have sufficient information. is this a C Corp or S Corp? what was the purpose of buying the properties? some of those losses/expenses possibly should have been added to the tax basis of the properties or maybe the expenses need to be allocated between the properties.

cn575Author

This is a C corp. Buying the vacant lots for investments with the intention to sell them to the right investment. The accumulated losses are from property taxes and lot maintenance.