In 2014,Jenny had a $12,000 net short-term capital loss and deducted $3,000 as a capital loss deduction.In 2015,Jenny has a $18,000 0%/15%/20% long-term capital gain and no other capital gain or loss transactions.Which of the statements below is correct?
A)Jenny has a 2015 $18,000 net capital gain.
B)Jenny has a 2015 $9,000 net capital gain.
C)Jenny has a 2015 $9,000 net capital loss.
D)Jenny has a 2015 $3,000 capital loss deduction.
E)Jenny has a 2015 $9,000 capital loss deduction.

Question

Quizplus · Accepted Answer

First, we need to apply the $3,000 capital loss deduction from 2014 to Jenny's 2015 long-term capital gain. This reduces the taxable long-term capital gain to $15,000 ($18,000 - $3,000). Next, we need to net the remaining $15,000 long-term capital gain with the $12,000 short-term capital loss from 2014. The net capital gain for 2015 is then $3,000 ($15,000 - $12,000). Therefore, Jenny has a 2015 $3,000 net capital gain.

In 2014,Jenny Had a $12,000 Net Short-Term Capital Loss and Deducted