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Gordon Grumps is married and files separately. During 2019, he had the following capital gains and...

Question

Gordon Grumps is married and files separately. During 2019, he had the following capital gains and...

Gordon Grumps is married and files separately. During 2019, he had the following capital gains and losses:

STCL ($1,000)

STCG 1,900

STCL carryover from 2018 (200)

LTCG 600 LTCL (10,000)

Gordon’s taxable income is $6,000. What is Gordon’s capital loss deduction for 2019 and his carryover?

Answers

Gordon Grumps:

Loss on capital assets is not allowed to set off against any other head of income other than Capital gains head. Long term capital loss can set off against Long term capital gains, Short term capital loss can set off against short term capital gains and long term capital gains. Unadjusted loss can be carryover to future assessment years.

In this case:

Capital loss deduction for 2019 -

Short term capital loss against short term capital gain for 2019 $ 1,000
Short term capital loss carryover from 2018 against short term capital gain for 2019 $ 200
Long term capital loss against long term capital gain for 2019 $ 600

Total capital loss deduction for 2019 - $ 1,800

Unadjusted Long term capital loss ($ 10,000 - $ 600) = $ 9,400 Carryover to future assessment years.


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