Martha has both long-term and short-term 2016 capital gains and losses. The result of netting these gains and losses is a net long-term capital loss. Martha has no qualified dividend income. Also, Martha's 2016 taxable income puts her in the 28% tax bracket. Which of the following is correct?

Question

Quizplus · Accepted Answer

Martha will use Parts I, II, and III of Schedule D to report her capital gains and losses. She will not benefit from the special treatment for long-term capital gains because she has a net long-term capital loss. She can deduct up to $3,000 of her capital loss against other income, resulting in a capital loss deduction.

Martha Has Both Long-Term and Short-Term 2016 Capital Gains and Losses