A taxable entity has the following capital gains and losses in 2016:

Question

A taxable entity has the following capital gains and losses in 2016:  ​

Quizplus · Accepted Answer

Statement I is incorrect because capital losses can be carried forward indefinitely, not just for three years.
Statement II is correct because the taxable entity has a net capital loss of $6,000, which can be used to offset other forms of income in the current year up to a limit of $3,000. The remaining amount of the loss, in this case $3,000, can be carried forward to future tax years.

A Taxable Entity Has the Following Capital Gains and Losses