CASE $5$: short term gain exceeds long term loss

Short term gain $$400$

Short term loss $$200$

Net short$-$term gain: $$200$

If net long$-$term losses are less than short$-$term gains, the resulting net capital gain is taxed as short$-$term$|$

Long term gain: $$400$

Long term loss: $$400$

Net long$-$term loss: $$100$

Tax implication:

$$100$ long term loss is used to offset short term gain; net $$100$ gain is taxed as ordinary income.