In 2009,Jenny had a $12,000 net short-term capital loss and deducted $3,000 as a capital loss deduction.In 2010,Jenny has a $16,000 0%/15% long-term capital gain and no other capital gain or loss transactions.Which of the statements below is correct?

Question

Quizplus · Accepted Answer

Since Jenny had a net short-term capital loss of $12,000 and only deducted $3,000 in 2009, she has a remaining short-term capital loss of $9,000. This short-term capital loss can be carried forward and offset against future capital gains. 
In 2010, Jenny had a $16,000 long-term capital gain. She can use the $3,000 capital loss deduction first to offset this gain, leaving her with $13,000 remaining long-term capital gain. 
Then, she can offset the $9,000 short-term capital loss that was carried over from 2009 against this remaining long-term capital gain, leaving her with a net capital gain of $4,000.
Thus, the correct answer is B. Jenny has a 2010 $7,000 net capital gain.

In 2009,Jenny Had a $12,000 Net Short-Term Capital Loss and Deducted