LO8 Bongo Corporation is incorporated in 2008. It has no capital asset transactions in 2008. From 2009 through 2012, Bongo has the following capital gains and losses:

Assuming that Bongo’s marginal tax rate during each of these years is 34%, what is the effect of Bongo’s capital gains and losses on the amount of tax due each year?

Transcribed Image Text:

2009 2010 2011 Capital gains Capital losses $14,000 (8,000) $ 12,000 (26,000) $ 9,000 (22,000) 2012 $ 30,000 (11,000)