Question

In the current year, Norris, an individual, has $59,000 of ordinary income, a net short-term Capital loss (NSTCL) of $9,100 and a net long-term capital gain (NLTCG) of $3,700. From his capital gains and losses, Norris reports:
A. an offset against ordinary income of $9,800
B. an offset against ordinary income of $3,000 and a NSTCL carryforward of $6,900
C. an offset against ordinary income of $3,000 and a NSTCL carryforward of $3,900
D. an offset against ordinary income of $3,000 and a NSTCL carryforward of $6,800
E. an offset against ordinary income of $2,900 and a NSTCL carryforward of $6,900

Answer 1

Answer: an offset against ordinary income of $3,000 and a NSTCL carryforward of $2,400

Explanation:

Feom the question, we are told that in the current year, Norris, an individual, has $59,000 of ordinary income, a net short-term Capital loss (NSTCL) of $9,100 and a net long-term capital gain (NLTCG) of $3,700.

From his capital gains and losses, Norris reports an an offset against ordinary income of $3,000 and the a net short-term Capital loss (NSTCL) balance carryforward will be the difference between the net short-term Capital loss (NSTCL) of $9,100 and a net long-term capital gain (NLTCG) of $3,700 and the offset against ordinary income. This will be:

= ($9100 - $3700) - $3000

= $5400 - $3000

= $2400