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:

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

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

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

= -$300 + $8970

= $8,670

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

ekkarill92 answered 1 year ago

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