How can capital losses be used by corporations?

Corporations can use capital losses primarily by offsetting them against capital gains. When a corporation realizes a capital loss from the sale of a capital asset, it can use that loss to reduce the tax liability associated with capital gains from the disposition of other assets. This means that if a corporation incurs losses from one investment, those losses can effectively be used to lower the taxable gains from another, ensuring that the corporation is only taxed on its net capital gains.

Additionally, the ability to carry capital losses into future tax years is available, but there are specific limitations. Corporations can carry capital losses back to previous tax years or forward to future years, but only against capital gains, not against ordinary income, and these losses do not reduce tax liabilities directly. Therefore, the option to offset against ordinary income or to carry forward without limitation does not align with the rules governing how corporations handle capital losses. Thus, accurately utilizing capital losses primarily involves offsetting them against capital gains, making the response correct.