A is corrent. The net long-term capital loss (LTCL) ($13,000) is netted against the net short-term capital gain ($5,000) resulting in an $8,000 net LTCL. A net LTCL is deducted dollar for dollar, the same as a net STCL. A maximum of $3,000 of capital loss may be taken in any one year. The result of taking a $3,000 loss deduction is that the net LTCL is reduced by $3,000 and $5,000 of LTCL ($8,000 – $3,000) will be available for carryover to the next taxable year.
B is incorrect. There is a $3,000 deduction and a $5,000 carryover.
C is incorrect. There is a $3,000 deduction and a $5,000 carryover.
D is incorrect. There is a $3,000 deduction and a $5,000 carryover.
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