In 2018, Jenny Had a $12,000 Net Short-Term Capital Loss

question 77

Multiple Choice

In 2018, Jenny had a $12,000 net short-term capital loss and deducted $3,000 as a capital loss deduction.In 2019, Jenny has a $18,000 0%/15%/20% long-term capital gain and no other capital gain or loss transactions.Which of the statements below is correct for 2019?

• A)Jenny has a $18,000 net capital gain.
• B)Jenny has a $9,000 net capital gain.
• C)Jenny has a $9,000 net capital loss.
• D)Jenny has a $3,000 capital loss deduction.
• E)Jenny has a $9,000 capital loss deduction.

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Definitions:

Common Equity

Common equity consists of a company's share capital and retained earnings, representing ownership interests in a corporation.

Valuation Model

A systematic approach used to determine the present value of an asset or a company based on expected future cash flows or earnings.

Weighted Average

A statistical measure calculated by multiplying each number in the data set by a predetermined weight and then summing all the products together to find their average, often used in finance for rates or costs.

Free Cash Flow

Free cash flow represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.