| To better understand the rules for offsetting capital losses and how to treat capital losses carried forward, analyze the following data for an unmarried individual for the period 2007 through 2010. No capital loss carryforwards are included in the figures. | |||||||||
| Required: | |||||||||
| For each year, determine AGI ad the capital losses to be carried forward to later tax year. | |||||||||
| Solution | |||||||||
| 2010 | 2011 | 2012 | 2013 | ||||||
| AGI (excluding property transactions) | $ 40,000 | $ 50,000 | $ 60,000 | $ 70,000 | |||||
| Short-term capital gains (STCG) | 4,000 | 5,000 | 7,000 | 10,000 | |||||
| Short-term capital losses (STCL) | 9,000 | 3,000 | 5,000 | 12,000 | |||||
| Long-term capital gains (LTCG) | 6,000 | 10,000 | 2,200 | 6,000 | |||||
| Long-term capital losses (LTCL) | 5,000 | 21,000 | 1,000 | 9,500 | |||||
| AGI (included in property transactions) | |||||||||
| STCL to be carried forward | – | – | – | ||||||
| LTCL to be carried forward | – | ||||||||
| Reconciliation: | |||||||||
| NSTCG (NSTCL) | |||||||||
| Carryforward from prior year | |||||||||
| Adjusted carryforward amount | |||||||||
| NLTCG (NLTCL) | |||||||||
| Carryforward from prior year | |||||||||
| Adjusted carryforward amount | |||||||||
| Capital loss recorded on tax return |
Here is the document file
