In 2010,Mark has $18,000 short-term capital loss,$7,000 28% gain,and $6,000 0%/15% gain.Which of the statements below is correct?

Question

Quizplus · Accepted Answer

According to the IRS rules, capital losses can offset capital gains and up to $3,000 of ordinary income each year. So, Mark can use $3,000 of the $18,000 capital loss to offset ordinary income, leaving him with $15,000 capital loss. He can then use the $7,000 28% gain to offset $7,000 of the $15,000 capital loss, leaving him with $8,000 capital loss. Finally, he can use $6,000 of the remaining $8,000 capital loss to offset the 0%/15% gain, leaving him with $2,000 capital loss, which is less than the $3,000 deduction limit. Therefore, the correct answer is B, Mark has a $3,000 capital loss deduction.

In 2010,Mark Has $18,000 Short-Term Capital Loss,$7,000 28% Gain,and $6,000