In the same year, a customer has $14,000 of long-term capital losses on stock positions and $4,000 of short-term capital gains on options positions. Which statement is TRUE?
A. The capital losses can be netted against the capital gains and a $10,000 net capital loss is reported, all of which is deductible
B. The capital losses can be netted against the capital gains and a $10,000 net capital loss is reported, $3,000 of which is deductible
C. The $14,000 of capital losses on the stock positions must be reported separately from the $4,000 of capital gains on the options positions, with all $14,000 of capital losses being deductible and all $4,000 of capital gains being taxable
D. The $14,000 of capital losses on the stock positions must be reported separately from the $4,000 of capital gains on the options positions, with only $3,000 of capital losses being deductible and all $4,000 of capital gains being taxable
Answer: B. The capital losses can be netted against the capital gains and a $10,000 net capital loss is reported, $3,000 of which is deductible