In 20X2, T, an Individual Taxpayer, Had a Net Short-Term

question 32

Multiple Choice

In 20X2, T, an individual taxpayer, had a net short-term capital loss of $3,000 and a net long-term capital loss of $3,000.The capital loss carryover is

• A)$3,000 net short-term capital loss
• B)$3,000 net long-term capital loss
• C)$1,500 net short-term and $1,500 net long-term capital loss
• D)$0; losses cannot be carried over

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Definitions:

Capital Lease

A lease agreement that is treated like an asset purchase for accounting purposes, where the lessee obtains the benefits and risks of ownership.

Bargain Purchase Option

An option in a lease agreement that allows the lessee to purchase the leased item at a price significantly lower than its expected fair market value.

Economic Life

The expected period of time during which an asset is useful to the average owner, or until the asset can no longer be economically used.

Lease Term

The fixed, non-cancelable duration of a lease agreement, often including options to renew for additional periods.