In 2018, Mark has $18,000 short-term capital loss, $7,000 28% gain, and $6,000 0%/15%/20% gain. Which of the statements below is correct?

Question

Quizplus · Accepted Answer

Firstly, Mark can only use up to $3,000 of his capital losses to offset ordinary income. Therefore, he can use the $18,000 short-term capital loss to offset $3,000 of his ordinary income, leaving him with $15,000 of remaining net capital loss.
Next, Mark has a 28% gain of $7,000 and a combined gain of $6,000 with rates of 0%, 15%, and 20%. He can use the remaining $3,000 net capital loss to offset part of the gains, which leaves him with a net capital gain of $10,000 ($7,000 + $6,000 - $3,000). 
Since Mark has a net capital gain, he must report it on his tax return. Therefore, choices C, D, and E are incorrect. 
The correct answer is B because Mark can use up to $3,000 of his capital losses to offset his ordinary income.

In 2018, Mark Has $18,000 Short-Term Capital Loss, $7,000 28