Ellie has the following capital gains and losses and qualified dividend income during the current year:
$\begin{array}{lc}
\text { Short-term capital loss } &\$(10,000) \
\text { Collectibles loss } &(4,000) \
\text { Long-term capital gain } &5,000 \
\text { Qualified dividend income } &10,000
\end{array}$
The tax effect of the above is:
A)Long-term gain $3,000; short-term capital loss $10,000,
B)Long-term capital gain $7,000; short-term capital loss $14,000.
C)Collectibles loss $1,000; net short-term capital loss $5,000; qualified dividend income $10,000.
D)Net short-term capital loss $9,000; qualified dividend income $10,000.
E)Net capital loss $3,000, qualified dividend income $10,000.

Question

Quizplus · Accepted Answer

The net capital loss is calculated by offsetting the long-term capital gain of $5,000 against the short-term capital loss of $10,000 and the collectibles loss of $4,000, resulting in a net capital loss of $3,000. The qualified dividend income remains $10,000.

Ellie Has the Following Capital Gains and Losses and Qualified