Midterm Exam Question 2 Answer

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Midterm Exam

2.  Joel has four transactions involving the sale of capital assets during the year resulting in a STCG of $5,000, a STCL of $12,000, a LTCG of $1,800 and a LTCL of $1,000. As a result of these transactions, Joel will

  1. deduct losses of $3,000 against ordinary income and carry $3,200 of LTCL forward.
  2. deduct losses of $3,000 against ordinary income and carry $3,200 of losses back two years.
  3. deduct net losses of $6,200 against ordinary income.
  4. deduct losses of $3,000 against ordinary income and carry $3,200 of STCL forward.

 

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This question is taken from Accounting 015 – Tax Accounting I » Spring 2021 » Midterm Exam