During 2010, Harrier Corporation, a calendar year C corporation, has a $100,000 gain from the sale of real estate. The real estate was unimproved land that had been owned by Harrier for many years as

During 2010, Harrier Corporation, a calendar year C corporation, has a $100,000 gain from the sale of real estate. The real estate was unimproved land that had been owned by Harrier for many years as an investment. Concerned about its tax situation, in December Harrier sells stock in Falcon Corporation (also held as an investment) for a loss of $103,000. Because Falcon has significant growth potential, Harrier repurchases the stock in 2011. On its 2010 corporate income tax return, Harrier plans to deduct a net capital loss of $3,000. Evaluate the propriety of Harrier’s plans.

Leave a Comment