For 2021, Sherri has a short-term loss of $2,500 and a long-term loss of $4,750. a. How much loss can Sherri deduct in 2021?

Respuesta :

Based on the information given the amount of loss that  Sherri deduct in 2021 is $3,000.

Short-term loss and long-term loss

Since he had both short-term loss and long-term loss the amount of loss that is deductible is $3,000 of capital loss. ($1,500 each for married filing separately).

Both the short-term loss and the long-term loss are combined up to the limit of the amount of $3,000 and the capital loss in excess of the amount of $3,000 are carried forward to following year.

Inconclusion the amount of loss that  Sherri deduct in 2021 is $3,000.

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