Question

during the year, rey also claimed a business investment loss of $25,000. he has never used any of his lifetime capital gains exemption of $913,630 or had a cumulative net investment loss balance. what is the amount of the capital gains deduction available for rey to use against his taxable income?

Answer 1

Rey can apply his $25,000 business investment loss against his taxable income, with the amount of the capital gains deduction being limited to that loss. Since he has not used any of his $913,630 lifetime capital gains exemption, and without a cumulative net investment loss balance, the entire loss amount can be used. Precise calculation depends on specific tax laws.

Step-by-step explanation:

The student asks about the amount of the capital gains deduction that Rey can use against his taxable income, considering he has a business investment loss of $25,000. Rey has not used any of his lifetime capital gains exemption, which is $913,630. Since Rey has never had a cumulative net investment loss balance, the entire business investment loss can be applied against his taxable income. However, without detailed knowledge of the specific tax laws and the year to which this applies, including any potential changes to the exemption amount or the way investment losses are handled, a precise calculation cannot be made.