Question

During 2018, Wyatt Corporation (a calendar year taxpayer) had an excess Long-Term Capital Loss of $20,000 which it could not carry back to prior tax years. For 2019, Wyatt Corporation had a Long-Term Capital Gain of $50,000 and a Short-Term Capital Gain of $15,000. As a result of these transactions, for 2019, Wyatt Corporation has a net:

1. Short-Term Capital Gain of $15,000
2. Long-Term Capital Gain of $45,000
3. Short-Term Capital Gain of $45,000
4. Long-Term Capital Gain of $50,000

Answer 1

Solution :-

Given data are

Long term capital loss ( 2018 year ) = $ 20,000

Long term capital gain ( 2019 year ) = $ 50,000

Short term capital gain ( 2019 year ) = $ 15,000

Now as per the provisions long term capital loss can only be sett of against the income from long term capital gain

so we have resultant income

long term capital gain = $ 30,000

short term capital gain = $ 15,000

Hence option no ( a) with short term capital gain of $ 15,000 is satisfying the present scenario and is the correct answer.