In 2007, Mark has 17000 STCL, 6000 28% gain, and 7000 5%/15% gain. The net ST...

In 2007, Mark has 17000 STCL, 6000 28% gain, and 7000 5%/15% gain.

The net ST and/or LT gain and or losses for 2007? Show Work

What is the appropriate tax treatment of the net gain or loss? Be specific as to tax treatment.

Expert Solution

Compute Long-Term and Short-Term Gain / (Loss):

STCL (17,000)

28% gain 6,000

5%/15% gain 7,000

Net Short term capital loss (4,000)

Short term capital gain/loss is the gain/loss on asset held for less than a year and long term capital gain/loss is when the asset is held for a year or more. Mark has an overall net loss of $4,000. This loss can offset Mark's income from other sources to a maximum of $3,000 in the current year. And the remaining $1,000 will be carried forward to the future years infinitely. If there is no other income, then full amount of $4,000 can be carried forward. But the annual cap of $3,000 will apply in later years as well.

ekkarill92 answered 1 year ago

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