Determine the tax effects of the indicated losses for the Yellow Estate for both tax years. The estate holds a variety of investment assets, which it received from the decedent, Mrs. Yellow. The estate's sole income and remainder beneficiary is Yellow, Jr. All taxpayers use a calendar tax year.

Tax Year                                                                                Loss Generated

2016 (first tax year) ….................................................……… Taxable income ($300)

                                                                                                   Capital loss ($12,000)

2017 (final tax year) …………Taxable income, all classified as ordinary ($20,000)