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Three years ago, Adrian purchased 100 shares of stock in X Corp. for $10,000. On December...

Three years ago, Adrian purchased 100 shares of stock in X Corp. for $10,000. On December 30 of year 4, Adrian sells the 100 shares for $6,000. (Leave no answers blank. Enter zero if applicable. Loss amounts should be indicated with a minus sign.)


a. Assuming Adrian has no other capital gains or losses, how much of the loss is Adrian able to deduct on her year 4 tax return?

Solutions

Expert Solution

Adrian long-term capital loss = Sale Value - Purchase Value

                                                =$ 6000-$10000

                                                = $ 4000

Adrian can offset $3,000 of the capital loss against ordinary income during the current year assuming Adrian has no other capital gains or losses.

The remaining Capital Loss of $1,000 (i.e. $4,000 less the $3,000 deducted currently) is carried forward indefinitely.

Therefore Adrian able to deduct on her year 4 tax return = $ 3000

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ekkarill92 answered 1 year ago
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