Trendy Corporation has a net short-term capital loss of $9,000 and a net long-term capital loss of $14,000 in year 5. Trendy Corporation can
a. Deduct $3,000 of the short-term capital loss from its ordinary income and carry the remaining losses back to year 2.
b. Deduct $3,000 of the long-term capital loss from its ordinary income and carry the remaining losses forward indefinitely.
c. Deduct all $23,000 of the capital losses from its ordinary income.
d. Deduct none of the capital losses. The corporation must carry back the entire net capital loss as a short-term capital loss to year 2.