For 2012, Stuart has a short-term capital loss, a collectible long-term capital gain, and a long-term capital gain from land held as investment.The short-term loss is first applied to the collectible capital gain.

Question

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According to the IRS tax rules, short-term capital losses are first applied to any collectible long-term capital gains before they are applied to other long-term capital gains. Therefore, Stuart's short-term loss will be used to offset his collectible long-term gain before another long-term gain from land held as investment.

For 2012, Stuart Has a Short-Term Capital Loss, a Collectible