In 2014, Paul, a single taxpayer, has taxable income of $30,000 exclusive of capital gains and losses. Paul incurred a $1,000 short-term capital loss and a $5,000 long-term capital loss. What is the amount of his long-term capital loss carryover to 2015?

Question

Quizplus · Accepted Answer

Paul's net short-term capital loss is $0 ($1,000 short-term capital loss - $1,000 short-term capital gain = $0). 
Paul's net long-term capital loss is $4,000 ($5,000 long-term capital loss - $1,000 long-term capital gain = $4,000). 
Paul can use up to $3,000 of his net long-term capital loss to offset his ordinary income in 2014. 
The remaining $1,000 of his net long-term capital loss can be carried over to 2015. Therefore, the answer is C.

In 2014, Paul, a Single Taxpayer, Has Taxable Income of $30,000