Seamus had $16,000 of net short-term capital loss in 2016.In 2017,Seamus has $17,000 of long-term capital loss and $26,000 of long-term capital gain.Which of the following statements is correct?

Question

Quizplus · Accepted Answer

To determine the answer, we need to calculate Seamus's net capital gain/loss for each year separately and check for any carryover.

In 2016, Seamus had a net short-term capital loss of $16,000. This loss can be used to offset any capital gains in 2016, and if there are any excess losses, they can be carried over to future years. Since we don't have any information about Seamus's capital gains in 2016, we can assume that the entire $16,000 loss was carried over to 2017.

In 2017, Seamus had a $17,000 long-term capital loss and a $26,000 long-term capital gain. The capital loss can be used to offset the capital gain, leaving a net long-term capital gain of $9,000 ($26,000 - $17,000).

We don't know if Seamus had any short-term capital gains or losses in 2017, but we can calculate Seamus's net short-term capital gain/loss by subtracting any short-term capital gains from any short-term capital losses. Since we don't have this information, we'll assume that Seamus had no short-term capital gains in 2017, leaving a net short-term capital loss of $0.

Therefore, Seamus had a $13,000 short-term capital loss carryover to 2017 (option A is correct) and a $9,000 2017 net long-term capital gain (option B is incorrect). Based on our calculations, Seamus did not have any net short-term capital loss in 2017 (option C is incorrect). Hence, the correct answer is D.

Seamus Had $16,000 of Net Short-Term Capital Loss in 2016