Capital losses resulting from the sale of stock can be used
A)as a tax credit against dividend or capital gains income.
B)as a carry forward and used to reduce capital gains in the future.
C)as a direct deduction against tax owing.
D)to reduce total income only in the year the loss is taken.

Question

Quizplus · Accepted Answer

Capital losses resulting from the sale of stock can be carried forward and used to reduce capital gains in the future. This means that if an investor has a capital loss in one year, they can use it to offset capital gains in future years, thus reducing their taxable income. This is generally a more advantageous approach than using the loss as a direct deduction against tax owing or as a tax credit against dividend or capital gains income.

Capital Losses Resulting from the Sale of Stock Can Be