Series 7 practice questioneasyTax Implications — Capital Gains
Net capital losses can be deducted against ordinary income up to a maximum of how much per year for an individual taxpayer?
- A$1,000
- B$3,000✓ Correct answer
- C$5,000
- DThere is no limit
Explanation
Why B — $3,000
Individual taxpayers can deduct up to $3,000 ($1,500 for married filing separately) of net capital losses against ordinary income per year. Any excess capital losses are carried forward to future years indefinitely. There is no limit on capital losses used to offset capital gains; the $3,000 limit applies only to losses deducted against ordinary income.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 758+ Series 7 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Investment Information & Recommendations questions
- An investor sells 200 shares of MNO stock at a $4,000 loss on November 1. On October 15, the investor had purchased 100…
- An investor in the 24% tax bracket earns 3.00% on a municipal bond. A corporate bond yields 4.25%. Which provides a…
- Which of the following municipal bond types would NOT create an AMT preference item?
- The tax-equivalent yield formula is:
- Dividends from which of the following would NOT qualify for the preferential qualified dividend tax rate?
- Interest on U.S. Territory bonds (such as Puerto Rico, Guam, and the Virgin Islands) is:
- An original issue discount (OID) municipal bond is purchased at issuance for $900 with a par value of $1,000 and 10…
- An investor who is a resident of New York purchases a California municipal bond. The interest income is: