The maximum amount of net capital losses individual taxpayers may deduct against their ordinary income per year is:
A) There is no maximum. All losses are allowed to be deducted.
B) Zero, losses are not deductible.
C) $3,000.
D) $5,000.
E) None of the choices are correct.

Question

Quizplus · Accepted Answer

The maximum amount of net capital losses individual taxpayers may deduct against their ordinary income per year is $3,000. This means that if an individual has a net capital loss of $4,000, only $3,000 of that loss can be used to offset ordinary income. The remaining $1,000 can be carried forward to future tax years.

The Maximum Amount of Net Capital Losses Individual Taxpayers May