9 Alexis has along term Capital loss of $ 13,000 on the sale of stock in...

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9 Alexis has along term Capital loss of $ 13,000 on the sale of stock in the current year. She has no other capital gains or

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Answer 1

Answer #1

In case of only capital loss without any capital gains in a particular year. In that year capital loss can be setoff against ordinary income (i.e income other than capital gains).

The setoff of the capital loss towards ordinary income is limited upto $3000.

The given gas Alex has long term capital loss of $13000 no capital gains in current year. Alex has ordinary income of $60000.

Computation of current year taxable income of Alex

Particulars	Amount ($)
Ordinary income	60000
Less :- capital loss from sale of stock (we can set off capital loss towards ordinary income to the extent of $3000 only)	(3000)
Taxable income for the current year	57000

Taxable income of Alex for the current year is $57000

Alex can carry forward capital loss of $10000 for future tax periods.

These are all the explanations and calculations required to solve the given question.

I hope, all the above mentioned explanations and calculations are useful and helpful to you.

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Answer 2

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