Which of the following is not true of capital gains and losses?
A)Capital gains and losses are always netted before the treatment of the excess is determined.
B)Net short-term capital gains in excess of net long-term capital losses are subject to tax at ordinary rates.
C)Net capital losses in excess of net capital gains are fully deductible within an annual limitation.
D)A capital gain deduction is allowed for a portion of net long-term capital gains in excess of net short-term capital losses.

Question

Quizplus · Accepted Answer

The statement in D is not true because there is no specific "capital gain deduction" allowed for net long-term capital gains in excess of net short-term capital losses. Instead, net long-term capital gains are taxed at preferential long-term capital gains tax rates, which are generally lower than ordinary income tax rates, rather than being subject to a deduction per se.

Which of the Following Is Not True of Capital Gains