A net short-term capital loss first offsets any 28% net long-term capital gain before it offsets either 25% net long- term capital gain or 0%/15%/20% net long-term capital gain.

Question

Quizplus · Accepted Answer

This statement is true. Net short-term capital losses are first applied to offset any net long-term capital gains that are taxed at the highest rate of 28%. Only after that, they are applied to offset any net long-term capital gains that are taxed at 25%, 15%, or 0% depending on the taxpayer's income and filing status.

A Net Short-Term Capital Loss First Offsets Any 28% Net