An individual taxpayer with 2011 net short-term capital loss of $5,000 generally can deduct up to $3,000 for AGI and carry the balance forward to 2012.

Name: An individual taxpayer with 2011 net short-term capital loss of $5,000 generally can deduct up to $3,000 for AGI and carry the balance forward to 2012.
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This is correct per IRS rules. An individual taxpayer can deduct up to $3,000 in net short-term capital losses against their ordinary income and carry forward any excess to future years.

An Individual Taxpayer with 2011 Net Short-Term Capital Loss of $5,000