If you plan to sit for the Series 6 exam in the near future, make sure that you understand how to treat net capital losses, both short-term and long-term. For example, James works for a brokerage firm, and earns $150,000 per year. For the current year, James has long-term capital losses of $50,000. He also has short-term capital gains of $10,000. May James offset the gains with some of the losses? If so, what happens next? May he offset some of his employment income with some of the losses? If so, how much? These are the types of situations that you need to have down firmly for the test.
PS Watch for Bob Eder's forthcoming book, Study for the Series 6 Exam.
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