Frequently Asked Question
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?
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.
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.
by
Peter Cherewyk
Peter Cherewyk has worked in the financial field for over 10 years. He completed his Bachelor of Commerce from the University of Alberta, and is currently working towards a Chartered Financial Analyst designation. He enjoys hockey and hiking and the opportunity to teach others.
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