a customer has $12,000 of capital losses and $4,000 of capital gains in a tax year. On that year's tax return, the investor has

Question

3 years ago

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a customer has $12,000 of capital losses and $4,000 of capital gains in a tax year. On that year's tax return, the investor has

a: A $3,000 capital loss deduction with no loss carryforward B $3,000 capital loss deduction and a $5,000 loss carryforward C $8,000 capital loss deduction with no loss carryforward D $12,000 capital loss deduction

Business

1 answer:

Oksi-84 [34.3K] · Answer 1 · 2022-02-21T07:20:09+03:00

Answer:

B $3,000 capital loss deduction and a $5,000 loss carryforward

Explanation:

The computation is shown below:

The Net capital loss is

= $12,000 - $4,000

= $8,000

There is the maximum deduction with respect to the net capital loss arise from the other sources i.e. $3,000

So,

Loss carry forward is

= $8,000 - $3,000

= $5,000