For its year ended December 31, 2015, its first year end since incorporation, Scott Inc. reported the following income (losses) for tax purposes:

Business Loss (ball point pen business) $ (20,000)

Capital Loss (6,000)

On January 1, 2016, Dwight Corp. acquired control of Scott Inc. from an unrelated person and transferred its profitable office supplies business to Scott Inc. For its year ending December 31, 2016, Scott Inc. is expected to have the following income/ (losses):

Business Loss (ball point pens) $(3,000)

Business Income (stick it notes) 15,000

Taxable Capital Gain on sale of capital asset 6,000

Assuming ball point pens and stick it notes are similar products, which one of the following statements is TRUE?

a. For its year ending December 31, 2016, Scott Inc. will be able to deduct net capital losses of $3,000 provided that the ball point pen business is carried on throughout the taxation year ended December 31, 2015 with a reasonable expectation of profit.

b. For its year ending December 31, 2016, Scott Inc. will be able to deduct non-capital losses of $18,000 (max), provided that the ball point pen business is carried on throughout the taxation year ended December 31, 2016 with a reasonable expectation of profit.

c. For its year ending December 31, 2016, Scott Inc. will be able to deduct non-capital losses of $12,000 (max), provided that the ball point pen business is carried on throughout the taxation year ended December 31, 2016 with a reasonable expectation of profit.

d. For its year ending December 31, 2016, Scott Inc. will be able to deduct non-capital losses of $15,000 (max), provided that the ball point pen business is carried on throughout the taxation year ended December 31, 2016 with a reasonable expectation of profit.