Martha has both long-term and short-term 2016 capital gains and losses. The result of netting these gains and losses is a net long-term capital loss. Martha has no qualified dividend income. Also, Martha's 2016 taxable income puts her in the 28% tax bracket. Which of the following is correct?
a. Martha will use Parts I, II, and III of 2016 Form 1040 Schedule D.
b. Martha will not benefit from the special treatment for long-term capital gains.
c. Martha will have a capital loss deduction.
d. All of the above.
e. None of the above.
d
RATIONALE: Since Martha has both short-term (Schedule D, Part I) and long-term (Schedule D, Part II) capital gains and losses, the results of netting those items will be further netted in Schedule D, Part III. There is a net capital loss, so there will be a capital loss deduction.
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