Question

Jawan has the following capital gains and losses in the current year: Short-term capital loss $1,300 Long-term capital gain 8,600 Long-term capital loss 4,100 Long-term capital loss carryforward 3,500 What is the effect of the capital gains and losses on Jawan's taxable income? The capital gain and loss netting results in a short-term capital loss of $ Feedback Check My Work The netting procedure determines the net long-term and short-term capital gains or losses for the year.

Answer 1

First netting: Short-term gain and loss netting: $ Short-term capital gain Short-term capital loss Net short-term capital loss -0- (1.300) $11.3001 Long-term gain and loss netting: $ 8,600 (4,100) Long-term capital gain Long-term capital loss Long-term capital loss carryforward Net long-term capital gain 3.500 $ 1.000

Second netting: Net short-term capital loss Net long-term capital gain Net short-term capital loss $ (1,300) 1.000 $ 1300

Therefore, the capital gain and loss netting results in a short-term capital loss of $300.