The maximum amount of net capital losses individuals may deduct against their ordinary income per year is:

Question

Quizplus · Accepted Answer

Individuals may deduct up to $3,000 of net capital losses (capital losses minus capital gains) against their ordinary income every year. If their net capital losses exceed $3,000, the excess amount can be carried forward to future tax years. Option B is incorrect because $5,000 is not the correct maximum amount. Option C is incorrect because net capital losses are deductible against ordinary income up to $3,000. Option D is also incorrect because there is a maximum amount. Therefore, the correct answer is A, $3,000.

The Maximum Amount of Net Capital Losses Individuals May Deduct