Joel Has Four Transactions Involving the Sale of Capital Assets

question 1642

Multiple Choice

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

• A) deduct losses of $3,000 against ordinary income and carry $3,200 of LTCL forward.
• B) deduct net losses of $6,200 against ordinary income.
• C) deduct losses of $3,000 against ordinary income and carry $3,200 of STCL forward.
• D) deduct losses of $3,000 against ordinary income and carry $3,200 of losses back two years.

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Definitions:

Spool Valves

Mechanical devices used in hydraulic and pneumatic systems to control the flow of fluid or air, typically by moving a cylindrical spool within a housing to open or close channels.

Hydraulically

Pertaining to or involving the movement or operation of devices through the pressure of liquids in motion.

Electrically

Pertaining to the use or operation by electricity, involving electronic circuits or devices.

Milky Appearance

Describes a condition where a normally transparent or semi-transparent fluid, like oil or hydraulic fluid, has become cloudy, often due to contamination with water.