Determining Nancy's Financial Situation After Selling Stock

Calculating Nancy's Capital Gain or Loss

Nancy's financial situation after selling XYZ stock: Nancy sold the stock for $20,000, which she purchased nine months ago for $25,000. This results in a capital loss of $5,000.

Evaluating Each Statement

Nancy has an ordinary loss of $5,000: This statement is not true as the loss from selling the stock is classified as a capital loss, not an ordinary loss.

Nancy has a capital loss carryforward of $5,000: This statement is not true since there's no information about Nancy's other capital gains or losses to determine if there's an excess that can be carried forward.

Nancy has a deductible capital loss of $5,000: This statement is not true because the deductible limit for capital losses against ordinary income is $3,000 per year. Nancy's capital loss of $5,000 exceeds this limit.

Nancy has a deductible capital loss of $3,000: This statement is true. Despite having a capital loss of $5,000, Nancy can only deduct up to $3,000 against ordinary income each year. The remaining $2,000 can be carried forward.

Therefore, the true statement is that Nancy has a deductible capital loss of $3,000 in her financial situation after selling the stock.