Nancy has two investment accounts consisting of a personal investment portfolio, and her Roth IRA. Nancy owns 500 shares of IBM, which she acquired at $177.80 per share on February 16, 2017. As of today (10/20/2017), IBM is trading at $160.92. Nancy thinks that the stock is a good long-term investment, so she purchases an additional 800 shares on October 20, 2017 in her Roth IRA. She also decides that she will dispose of her holding of IBM in her personal portfolio today.
Consider the two security transactions and answer the following question.
What will Nancy recognize for federal income tax purposes on her 2017 federal income tax return?
$0
$8,440 short-term capital loss
$8,440 long-term capital loss
$8,440 short-term capital gain