Thoren Has the Following Items for the Year: $4,000 of Short-Term

Multiple Choice

Thoren has the following items for the year: $4,000 of short-term capital gain, $5,000 of 0%/15%/20% long-term capital gain, and $1,500 of 28% capital loss. Which of the following is correct?

A) The $1,500 loss will first be offset by the $4,000 short-term gain.
B) The $1,500 loss will first be offset by the $5,000 long-term gain.
C) The $4,000 short-term gain will first be offset by the $5,000 long-term gain.
D) The taxpayer will have a net short-term capital loss.
E) None of the above.