What is the taxpayer's long-term capital gain liability, given the following security sales during the tax year? Assume that she is in the 15% taxbracket for long-term capital gains and the 22% tax bracket for ordinary income.AssetStock AStock BStock CStock DO $648O $950O $1,637O $1,856Purchase dateNov 1, 2022May 4, 2023Feb 5, 2021Oct 6, 2018Sale dateNov 18, 2023Dec 30, 2023Oct 2, 2023May 4, 2023Capital gain (loss)+$2,400 (gain)+$8,050 (gain)-$1,560 (loss)+$3,480 (gain)

Long-term capital gain liability refers to the tax obligation incurred on profits from the sale of…

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What is the taxpayer's long-term capital gain liability, given the following security sales during the tax year?

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter4: Additional Income And The Qualified Business Income Deduction

Section: Chapter Questions

Problem 6MCQ: In 2019, what is the top tax rate for individual long-term capital gains and the top tax rate for...

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

What is the taxpayer's long-term capital gain liability, given the following security sales during the tax year? Assume that she is in the 15% tax
bracket for long-term capital gains and the 22% tax bracket for ordinary income.
Asset
Stock A
Stock B
Stock C
Stock D
O $648
O $950
O $1,637
O $1,856
Purchase date
Nov 1, 2022
May 4, 2023
Feb 5, 2021
Oct 6, 2018
Sale date
Nov 18, 2023
Dec 30, 2023
Oct 2, 2023
May 4, 2023
Capital gain (loss)
+$2,400 (gain)
+$8,050 (gain)
-$1,560 (loss)
+$3,480 (gain)

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