Question

In: Accounting

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 $ 7,950 7/22/2019 $ 5,060
Stock B 4/10/2019 15,400 9/13/2019 19,210
Stock C 8/23/2017 12,500 10/12/2019 17,680
Stock D 5/19/2009 5,790 10/12/2019 13,450
Stock E 8/20/2019 7,790 11/14/2019 3,850

a. What is Grayson’s net short-term capital gain or loss from these transactions?

b. What is Grayson’s net long-term gain or loss from these transactions?

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) Net short term capital gain or loss from these transactions:

Description Date purchase Basis Date sold Amount realized Short term capital gain
Stock A 1/23/1995 $7,950 7/22/2019 $5,060 $0
Stock B 4/10/2019 $15,400 9/13/2019 $19,210 $3,810
Stock C 8/23/2017 $12,500 10/12/2019 $17,680 $0
Stock D 5/19/2009 $5,790 10/12/2019 $13,450 $0
Stock E 8/20/2019 $7,790 11/14/2019 $3,850 ($3,940)
Total ($130)

b) Net long term capital gain or loss from these transactions:

Description Date purchase Basis Date sold Amount realized Long term capital gain
Stock A 1/23/1995 $7,950 7/22/2019 $5,060 ($2,890)
Stock B 4/10/2019 $15,400 9/13/2019 $19,210 $0
Stock C 8/23/2017 $12,500 10/12/2019 $17,680 $5,180
Stock D 5/19/2009 $5,790 10/12/2019 $13,450 $7,660
Stock E 8/20/2019 $7,790 11/14/2019 $3,850 $0
Total $9,950

c)

Net capital gain from these transactions = Short term capital gain/loss + Long term capital gain/loss

=($130) +$9,950

=$9,820

d)

Grayson's entire net capital gain of $9,820 will be taxed at preferential rate.

Please give a Thumbs up ?. Thanks!!


Related Solutions

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....
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 2020: (Loss amounts should be indicated by a minus sign.) Description Date Purchased Basis Date Sold Amount Realized Stock A 1/23/1996 $ 8,000 7/22/2020 $ 5,100 Stock B 4/10/2020 15,500 9/13/2020 19,330 Stock C 8/23/2018 12,625 10/12/2020 17,850 Stock D 5/19/2010 5,830 10/12/2020 13,525 Stock E 8/20/2020 7,825 11/14/2020 3,875 Problem 7-46 Part-a (Algo) a. What is Grayson’s net short-term capital gain or...
Grayson is in the 24 percent tax rate bracket and has sold the following stocks in...
Grayson is in the 24 percent tax rate bracket and has sold the following stocks in 2018: (Loss amounts should be indicated by a minus sign.) Description Date Purchased Basis Date Sold Amount Realized Stock A 1/23/1994 $ 8,000 7/22/2018 $ 5,100 Stock B 4/10/2018 15,500 9/13/2018 19,330 Stock C 8/23/2016 12,625 10/12/2018 17,850 Stock D 5/19/2008 5,830 10/12/2018 13,525 Stock E 8/20/2018 7,825 11/14/2018 3,875 a. What is Grayson’s net short-term capital gain or loss from these transactions? b....
Grayson is in the 24 percent tax rate bracket and has the sold the following stocks...
Grayson is in the 24 percent tax rate bracket and has the sold the following stocks in 2018: 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 What is Grayson’s net short-term capital gain or loss from these transactions? What is Grayson’s net long-term gain or loss from these transactions? What is...
Juan (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.)
  Juan (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 $ 7,850 7/22/2019 $ 4,980 Stock B 4/10/2019   15,200 9/13/2019   18,970 Stock C 8/23/2017   12,250 10/12/2019   17,340 Stock D 5/19/2009   5,710 10/12/2019   13,300 Stock E 8/20/2019   7,720 11/14/2019   3,800   c. What is...
John is in the 35% tax rate bracket and has sold the following stocks in 2017:...
John is in the 35% tax rate bracket and has sold the following stocks in 2017: Date purchased Basis Date Sold Amount Realized Stock A 1/23/2013 5,250 7/22/2017 3,500 Stock B 4/10/2017 14,000 9/13/2017 16,500 Stock C 8/23/2014 10,750 10/12/2017 15,300 Stock D 5/19/2014 4,230 10/12/2017 10,400 Stock E 8/20/2017 8,300 11/14/2017 3,500 Please answer the following questions based on the above information: a) What is George’s net short-term capital gain or loss from these transactions? b) What is George’s...
Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of...
Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of Microsoft common stock over the years: Date Purchased Shares Basis 7/10/2008 480 $ 18,240 4/20/2009 380 16,644 1/29/2010 580 18,328 11/02/2012 330 12,276 If Dahlia sells 1,040 shares of Microsoft for $60,320 on December 20, 2018, what is her capital gain or loss in each of the following assumptions? (Do not round intermediate calculations.) b. She uses the specific identification method and she wants...
Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of...
Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of Microsoft common stock over the years: Microsoft common stock Date Purchased Shares Basis 7/10/2008 400 $10,000 4/20/2009 300 $11,000 1/29/2010 500 $12,230 11/02/2012 250 $7,300 If Dahlia sells 800 shares of Microsoft for $40,000 on December 20, 2020, what is her capital gain or loss if she uses the FIFO method? Dahlia is in the 32 percent tax rate bracket and has purchased the...
Dahlia is in the 28 percent tax rate bracket and has purchased the following shares of...
Dahlia is in the 28 percent tax rate bracket and has purchased the following shares of Microsoft common stock over the years: Date Purchased Shares Basis 7/10/2007 400 $ 12,000 4/20/2008 300 10,750 1/29/2009 500 12,230 11/02/2011 250 7,300 If Dahlia sells 800 shares of Microsoft for $40,000 on December 20, 2017, what is her capital gain or loss in each of the following assumptions? (Do not round intermediate calculations.) a. She uses the FIFO method. b. She uses the...
Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of...
Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of Microsoft common stock over the years: Date Purchased Shares Basis 7/10/2008 490 $ 19,110 4/20/2009 390 17,472 1/29/2010 590 19,234 11/02/2012 340 12,988 If Dahlia sells 1,070 shares of Microsoft for $63,130 on December 20, 2018, what is her capital gain or loss in each of the following assumptions? (Do not round intermediate calculations.) a. She uses the FIFO method.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT