Question

Thoren has the following items for the year: $4,000 of short-term capital gain, $5,000 of 0%/15%/20% long-term capital gain, and $1,500 of 28% capital loss. Which of the following is correct?
a. The $1,500 loss will first be offset by the $4,000 short-term gain.
b. The $4,000 short-term gain will first be offset by the $5,000 long-term gain.
c. The $1,500 loss will first be offset by the $5,000 long-term gain.
d. The taxpayer will have a net short-term capital loss.
e. None of these choices are correct.

Answer 1

Answer:

The answer is "Choice c".

Explanation:

Initially, reimbursement would be achieved inside the long-term grouping of profits and losses as well as the short-term grouping of losses and gains. When these networks' results exhibit opposing values (it only is again and one a loss), their group outcomes were netted. There is still a net STCG of 4,000 USD as well as a net LTCG of 3,500 USD.