Affiliated group P-S has a consolidated capital loss carryover from 2011 of $4,000, which arose as the result of an investment by P.In 2012, S has a short-term capital gain of $5,000 and P has a short-term capital loss of $3,000.How much of P's loss for 2012 will be treated as a loss carryover to 2013, assuming 2011 was the first affiliated year of the group?

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The group has a consolidated capital loss carryover from 2011 of $4,000. In 2012, S has a gain of $5,000 and P has a loss of $3,000. The group's net gain for 2012 is $2,000 ($5,000 gain - $3,000 loss), which can be offset by the $4,000 loss carryover from 2011, leaving $2,000 of the 2011 loss carryover to be treated as a loss carryover to 2013. Therefore, all of P's loss for 2012 is used in 2012, and none of it is carried over to 2013.

Affiliated Group P-S Has a Consolidated Capital Loss Carryover from 2011