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Ellen loans Nicole $45,000 to start a hair salon. Unfortunately, the business fails in 2019 and she is unable to pay back Ellen. In 2019, Ellen also had $20,000 of income from her part-time job and $15,000 of capital gain from the sale of stock. How much of the $45,000 bad debt can Ellen claim as a capital loss in 2019? a. $15,000, with $30,000 carried forward to 2020 b. $18,000, with $27,000 carried forward to 2020 c. $35,000 d. $0 e. $12,000, with $33,000 carried forward to 2020

Respuesta :

holesstanham

Answer:

b. $18,000, with $27,000 carried forward to 2020.

Explanation:

Capital loss deduction exists in order to encourage people to take the risk of investing their money. Through this deduction, you can save some money on your taxes, which would make your loss less damaging to your personal finances. If you have capital gains income, you can use these capital losses to offset the gains. On the other hand, if you have more capital losses than gains on a given year, you can claim up to $3,000 of those losses and deduct them against other type of income. If you still have more losses than that, you can carry the excess forward to the next year.

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