Taxpayer sold the following investments (e.g. stocks) during the year: Date Purchased Adjusted Sales Basis ($)...
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Taxpayer sold the following investments (e.g. stocks) during the year: Date Purchased Adjusted Sales Basis ($) Price ($) A 01/05/21 05/05/22 15,800 B 03/06/22 12/11/22 11,000 C 09/22/19 06/06/22 44,000 D 11/11/21 11/04/22 20,000 E 03/19/19 06/20/22 23,000 F 5,000 Date Sold 19,100 24,400 43,100 21,600 18,700 10/10/21 10/15/22 3,000 G/(L) S (3,300) (13,500) 900 (1600) 4,300 2000 1. Step 1: Net STCG against STCL (in essence sum of ST transactions): Complete the Table: For each stock transaction, (a) calculate the amount of gain or (loss) and (b) identify as ST or LT. Investment A is shown as an example. 2. Step 2: Net LTCG against LTCL (in essence sum of LT transactions): ST or LT LT 3. Step 3: Assess sign of steps 2 and 3. Continue netting if required. I 4. Assume taxable income before capital gain or loss recognition was $89,000. What is taxable income after capital gain or loss recognition? 5. Calculate any capital gain or loss carryforward. Identify if as LT or ST. 6. Assume Step 1 was (15,000 STCL) and step 2 was (3,900 LTCL). Is Step 3 simply capital loss of (18,900)? Briefly explain. Taxpayer sold the following investments (e.g. stocks) during the year: Date Purchased Adjusted Sales Basis ($) Price ($) A 01/05/21 05/05/22 15,800 B 03/06/22 12/11/22 11,000 C 09/22/19 06/06/22 44,000 D 11/11/21 11/04/22 20,000 E 03/19/19 06/20/22 23,000 F 5,000 Date Sold 19,100 24,400 43,100 21,600 18,700 10/10/21 10/15/22 3,000 G/(L) S (3,300) (13,500) 900 (1600) 4,300 2000 1. Step 1: Net STCG against STCL (in essence sum of ST transactions): Complete the Table: For each stock transaction, (a) calculate the amount of gain or (loss) and (b) identify as ST or LT. Investment A is shown as an example. 2. Step 2: Net LTCG against LTCL (in essence sum of LT transactions): ST or LT LT 3. Step 3: Assess sign of steps 2 and 3. Continue netting if required. I 4. Assume taxable income before capital gain or loss recognition was $89,000. What is taxable income after capital gain or loss recognition? 5. Calculate any capital gain or loss carryforward. Identify if as LT or ST. 6. Assume Step 1 was (15,000 STCL) and step 2 was (3,900 LTCL). Is Step 3 simply capital loss of (18,900)? Briefly explain.
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Step 1 Net STCG compared to STCL or the total of all ST transactions We must total the STCG and STCL ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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