Your client has a net short-term gain of $3,000 and a net long-term loss of $8,000. Which of the following statements are true?

By Peter Cherewyk AAA
A:

I. The short-term gain is fully taxable
II. $3,000 of capital loss is deductible against earned income
III. There is a long-term loss carried forward of $2,000
IV. There is no loss carried forward



A. I & III



B. I & IV



C. II & III



D. I, II, & III




Correct answer: C



The gain and the loss are netted and result in a $5,000 long-term loss. $3,000 of that can be used in the current year as a deduction against earned income, and there will be a carry forward of $2,000.



RELATED FAQS

  1. What are the due diligence basics for investing in a startup?

    Learn about due diligence basics for investing in a startup, which includes an exit plan, a harvest strategy and evaluating ...
  2. What are typical trust fund management fees?

    Learn about trust fund management fees, such as the annual management fee, annual expense ratio, brokerage commissions and ...
  3. What is the difference between a Sharpe ratio and a Sortino ratio

    Understand the differences between the Sharpe ratio and the Sortino ratio, two risk-adjusted return on investment calculations, ...
  4. What's the average salary of a financial advisor?

    Learn about average salaries for financial advisors. Explore different levels of compensation financial advisors receive ...
RELATED TERMS
  1. Nelson Peltz

    One of the most successful activist investors in the financial ...
  2. Robo-advisor (robo-adviser)

    Definition of Robo Financial Advisers
  3. Comprehensive Automated Risk Data System (CARDS)

    The Comprehensive Automated Risk Data System (CARDS) is an initiative ...
  4. Security Market Indicator Series - SMIS

    An index that uses the performance of a sampling of securities ...
  5. National Association of Personal Financial Advisors (NAPFA)

    A U.S.-based professional association for professional fee-only ...
  6. Gentry-De La Garza Model

    A different way of managing account receivables, proposed by ...

You May Also Like

Related Articles
  1. Professionals

    When Your Client's Retirement is Around ...

  2. Professionals

    A New Wake-up Call for Savers

  3. Professionals

    Retirement Bliss? Not So fast: When ...

  4. Professionals

    Why Now is the Time to Snag Gen X Clients

  5. Professionals

    Preparing Your Clients for the Next ...

Trading Center