Question

In: Accounting

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

  1. 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

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

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

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

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

Solutions

Expert Solution

Calculation of short-term and long-term capital gain or loss are as follows:

Results of the excel sheet are as follows:

d. Overall net capital gain is $8,670, which is taxable at a preferential rate of 24%.


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