Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps

Exercise 47

When there are a net short-term loss and a net long-term loss, which of the following is true? a. The entire short-term loss is used to reduce other income before the long-term loss can be used to offset other income.
B) A long-term loss is used to reduce other income before the short-term loss.
C) Regardless of the amount of a short-term or long-term loss, the maximum amount of loss that can be taken in any one year is $3,000. Any remaining loss amounts can be carried forward for three years for individual taxpayers.
D) Regardless of the amount of a short-term or long-term loss, the maximum amount of loss that can be taken in any one year is $3,000. Any remaining loss amounts can be carried forward indefinitely for individual taxpayers.