Question

For the current year, Sarah has salary of 50,000. In addition, she has the following capital transactions:

Long-term capital gain (15%)         12,000

Short-term capital gain                     8,000

Long-term capital loss (28%)          (4,000)

Short-term capital loss                    (10,000)

What is her taxable income for the year? She has a short-term capital loss carry-over of 5,000 from the previous year. The standard deduction amount for her is 12,000

Question 6 options:

	37,000
	39,000
	49,000
	59,000
	None of the above

Answer 1

Particulars	Short-term	Long-term Collectible	Long-term other
Gains	$            8,000		$          12,000
Losses	$        (15,000)	$          (4,000)	$                  -
Net gain / (loss)	$          (7,000)	$          (4,000)	$          12,000
Less: long-term capital loss		$            4,000	$          (4,000)
Less: short-term capital loss	$            7,000	$                  -	$          (7,000)
Balance	$                  -	$                  -	$            1,000

Short-term capital losses include short-term capital loss carryover. Taxable income of taxpayer is:

Taxable income	Amount
Salary	$          50,000
Capital gains	$            1,000
Gross income	$          51,000
Deductions:
Standard deduction	$        (12,000)
Taxable income	$          39,000

Thus, taxable income is $39,000. Please rate the answer.