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Grayson (single) is in the 24 percent tax rate bracket and has sold the following stocks...

Grayson (single) is in the 24 percent tax rate bracket and has sold the following stocks in 2019: (Loss amounts should be indicated by a minus sign.

Description Date Purchased Basis Date Sold Amount Realized
Stock A 1/23/1995 $ 7,250 7/22/2019 $ 4,500
Stock B 4/10/2019 14,000 9/13/2019 17,500
Stock C 8/23/2017 10,750 10/12/2019 15,300
Stock D 5/19/2009 5,230 10/12/2019 12,400
Stock E 8/20/2019 7,300 11/14/2019 3,500

c. What is Grayson’s overall net gain or loss from these transactions?

d. What amount of the gain, if any, is subject to the preferential rate for certain capital gains?


      

Solutions

Expert Solution

Solution:

a.

Description Date Purchased Basis ($) Date Sold Amount Realized ($) Short-Term Capital Gain ($)
Stock A 01-23-1995 7250 07-22-2019 4500 0
Stock B 04-10-2019 14000 09-13-2019 17500 3500
Stock C 08-23-2017 10750 10-12-2019 15300 0
Stock D 05-19-2009 5230 10-12-2019 12400 0
Stock E 08-20-2019 7300 11-14-2019 3500 -3800
Total -300

b.

Description Date Purchased Basis ($) Date Sold Amount Realized ($) Short-Term Capital Gain ($)
Stock A 01-23-1995 7250 07-22-2019 4500 -2750
Stock B 04-10-2019 14000 09-13-2019 17500 0
Stock C 08-23-2017 10750 10-12-2019 15300 4550
Stock D 05-19-2009 5230 10-12-2019 12400 7170
Stock E 08-20-2019 7300 11-14-2019 3500 0
Total 8970

c.

Net Capital Gain From These Transactions = Short-Term Capital Gain/Loss + Long-Term Capital Gain/Loss

= -$300 + $8970

= $8,670

d.

Grayson's Entire Net Capital Gain of $8,670 will be taxed at a preferential rate.

ekkarill92 answered 2 years ago
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