Question

Brent files a return as married filing jointly. In 2019, he had the following items: • Salary of $104,000. • Loss of $105,000 on the sale of § 1244 stock acquired two years ago. • Interest income of $8,000. Brent's capital loss carryforward is:

Answer 1

Brent's capital loss carry forward is $2,000.

Step-by-step explanation:

The long term capital loss os computed as:

Long term capital loss = Loss - $100,000 {limitation of $100,000}

= $105,000 - $100,000

= $5,000

Of this amount, only $3,000 is the limitation of the capital losses against the ordinary income.

So, the capital loss carry forward is computed as:

=$5,000 - $3,000

= $2,000