Question

I:5-49 Capital Losses

To better understand the rules for offsetting capital losses and how to treat capital losses carried forward, analyze the following data for an unmarried individual for the period 2015 through 2018. No capital loss carryforwards are included in the figures. For each year, determine AGI and the capital losses to be carried forward to a later tax year.

	2015	2016	2017	2018
ACI (excluding property transactions)	40,000	50,000	60,000	70,000
STCG	4,000	5,000	7,000	10,000
STCL	9,000	3,000	5,000	12,000
LTCG	6,000	10,000	2,200	6,000
LTCL	5,000	21,000	1,000	9,500
AGI (including property transactions)
STCL to be carried forward
LTCL to be carried forward

Answer 1

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Answer is highlighted in Yellow: solution: Year 2015 Year 2016 Year 2017 Year 2018 $ 40,000 $ 50,000 $ 60,000 $ 70,000 AGI before capital gain or loss Net Capital loss: 2015: STCG 2016: STCL 2017: LTCG 2018: LTCL Net Capital gain / -loss: Allowable capital loss deduction AGI (including property transactions) $ $ $ $ $ $ $ 4,000 $ -9,000 $ 6,000 $ -5,000 $ 4,000 $ -3,000 $ 37,000 $ 5,000 $ -3,000 $ 10,000 $ -21,000 $ -9,000 $ -3,000 47,000 $ 7,000 $ 5,000 $ 2,200 $ 1,000 $ 3,200 $ $ 63,200 $ 10,000 -12,000 6,000 -9,500 -5,500 -3,000 (capped $3,000 per tax year) 67,000 STCL to be carried forward $ 1,000 LTCL to be carried forward $ 6,000 $ 2,500