Tom and Laura are in the 39.6% tax bracket for ordinary income and the 20% bracket for capital gains (ignore the 3.8% additional tax on investment income for higher-income taxpayers.) They Have owned several blocks of stock for many years. They are considering the sale of two blocks of stock. The sale of one block would produce a gain of $10,000. The sale of the other would produce a loss of $15,000. For purposes of this problem, ignore personal exemptions, itemised deductions and other phase-outs. They have no other gains or losses this year.

Required:

What will be the impact on their taxes if they sell both blocks of stock?

Answer rating: 100% (QA)

Sale of one Block 10000 Sale of second Block 15000 Net Capital Loss 5000 3000 should be adjusted aga... View the full answer