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Last Year Cell 2 Had a Net Operating Loss of $120,000

Question 7

Multiple Choice

Last year Cell 2 had a net operating loss of $120,000 and a capital loss of $80,000. This year (2010) the firm has an operating income of $230,000 and a capital gain of $40,000. What is Cell 2's tax liability this year? Assume there are no other tax loss carry backs or carry forwards.


A) $4,500
B) $72,950
C) $26,150
D) $12,500

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