Homework Answers
Solution:
| Situation 1 | Situation 2 | Situation 3 | Situation 4 | |
| NSTCG [NSTCL] | $ 4,500 | $ - | $ - | $ 4,000 |
| NLTCG [NLTCL] | $ 3,000 | $ 2,000 | $ - | $ - |
| AGI after considering capital gains or losses | $ 70,000 | $ 30,000 | $ 59,500 | $ 77,000 |
Working:
| Situation 1 | Situation 2 | Situation 3 | Situation 4 | |
| NSTCG [NSTCL] | 6000-1500 | (2500-4000)+1500 | 6500-4500-2000 | 19500-6500-6000-3000 |
| NLTCG [NLTCL] | 4500-1500 | (10000-6500)-1500 | 15500-13000-2000-500 | 8500-2500-6000 |
| AGI after considering capital gains or losses | $ 70,000 | $ 30,000 | 60000-500 | 80000-3000 |
Netting Process:
1) Firstly capital gains are set off against each other and any capital loss left after set off against gain then such losses are adjusted to AGI subjected to maximum of $3,000 per year.
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