Gabrielle has the following gains and losses for the current year:
Short-term capital loss
$(8,000)
Long-term capital gain
3,000
Section 1231 gain
3,000
Section 1231 loss
(5,000)
What is Gabrielle's net capital gain or loss position for the year?
A)$7,000 net short-term capital loss.
B)$3,000 net short-term capital gain.
C)$5,000 net short-term capital loss.
D)$3,000 net short-term capital gain

Question

Quizplus · Accepted Answer

To calculate Gabrielle's net capital gain or loss position, we must first offset the long-term capital gain with the section 1231 loss. This gives us a net section 1231 loss of $2,000. We can then offset this net section 1231 loss with the short-term capital loss, resulting in a net short-term capital loss of $10,000 ($2,000 + $8,000). Therefore, the answer is option C, $5,000 net short-term capital loss.

Gabrielle Has the Following Gains and Losses for the Current