In 2011,Philippe,a single taxpayer,has taxable income of $40,000 exclusive of capital gains and losses.Philippe incurred a $2,000 short-term capital loss and a $6,000 long-term capital loss in 2011.What is the amount of his long-term capital loss carryover to 2012?

Question

Quizplus · Accepted Answer

Taxpayers can use up to $3,000 of capital losses to offset ordinary income in a given tax year. Since Philippe had $40,000 of taxable income and only $2,000 of short-term capital losses, he cannot use the full $3,000 of capital losses to offset ordinary income. Therefore, he can carry over the remaining $1,000 of short-term capital loss and the full $6,000 of long-term capital loss to 2012. So, the amount of his long-term capital loss carryover to 2012 is $6,000.

In 2011,Philippe,a Single Taxpayer,has Taxable Income of $40,000 Exclusive of Capital