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
2014 (first tax year) ...................... Taxable income ($300)
............................................... Capital loss ($12,000)
2015 (final tax year) ...................... Taxable income, all classified
................................................ as ordinary ($20,000)