An offset against ordinary income of $3,000 and a NSTCL carryforward of $2,800.
$3,500 NLTCG − $9,300 NSTCL = $5,800 NSTCL. Use $3,000 NSTCL to reduce ordinary income leaving $ 2,800as a NSTCL carryforward.
What are capital gains and losses?
The difference between the capital asset's adjusted basis and the transaction's value determines any gain or loss on the asset's sale.
Can capital gains be offset by losses?
Yes however there are restrictions. Your investments' losses are initially applied to capital gains of the same kind. As a result, short-term losses are subtracted from short-term profits before long-term losses are subtracted from long-term gains. Then, net losses of either kind may be subtracted from the other form of gain.
Why are capital losses limited $3000?
Limits on capital losses are put in place because stock owners decide when to realize gains and losses on their own. The restriction prevents people from deferring taxes until death, when they are entirely avoided, by recognizing losses on assets that have appreciated in value.
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