Question

(Capital Gains and Losses – Introduction).

In 2018, Steven Spielberg (single) has $5,000 of net short-term capital loss and $17,000 of net long-term capital loss. In 2019, he has $2,000 of net short-term capital gain, $8,000 of net 28% long-term capital gain, and $4,000 of net 0%/15%/20% long-term capital gain.

Determine the type (short-term or long-term) and amount of capital loss to be carried forward to 2019 and 2020, respectively.

Very well organised, please how every step.

Answer 1

solution

Absolute conveyed forward shortfall = Net Short term Capital loss+Net Long term capital deficit

= $5,000+$17,000

=$22,000

Hence,capital misfortune is to be conveyed forward to 2018 =$22,000

In 2018:

Presently set off from momentary addition

=$2,000 of net momentary capital increase + $8,000 of net 28% long haul capital gain+and $4,000 of net 0%/15%/20% long haul capital addition.

=$2000+2240+1400

yearly point of confinement for single, family unit, widow, wedded filling together is 3000, and in the event that in any year total deficit is over from capital increase, at that point it is to be sent to one year from now, and set off as though it is brought about in that one year from now.

Hence

Initial 2000 of present moment is set off from momentary addition

Furthermore, next 1000 of present moment is set off against 0%/15%/20% long haul capital addition

Then,For 2020 conveyed forward from 2018 will be 2000(short term), 17000 (Long term) Loss.