Question

If Julia Diaz is single and in the 32% tax bracket, calculate the tax impact of each of the following security transactions. (Use the IRS regulations for capital gains in effect in 2018.) EXHIBIT 3.2 Capital Gains Tax as of 2018 Short-term gains from the sale or exchange of property (investment assets not used in a business) and held for less than 12 months are taxed at the same rates as ordinary income (10%, 12%, 22%, 24%, 32%, 35%, and 37%). Long-term gains from the sale or exchange of property held for more than 12 months are taxed as follows: Ordinary Tax Rate Alternative Capital Gains Tax Rate 10% or 12% 22%, 24%, 32%, or 35% 15% 0% 37% 20% Treat each of the following cases as independent of the others. a. She sold stock for $1,695 that she purchased for $1,500 8 months earlier. Round the answer to the nearest cent. Tax savings should be preceded by a "-"sign. b. She sold bonds for $3,500 that she purchased for $3,000 4 years earlier. Round the answer to the nearest dollar. Tax savings should be preceded by a "." sign. C. She sold stock for $3,080 that she purchased for $4,000 9 months earlier. Assume this to be the only Stock in Arabella's portfolio. Round the answer to the nearest cent. Tax savings should be preceded by a " sign.

Answer 1

Ans a
The stock sold was held for less than 1 year hence short term capital gain and it will
be taxed at ordinary tax rate
STCG=1695-1500	195
Tax 195*32%	$62.40
ans b
The stock sold was held for more than 1 year hence long term capital gain and it will
be taxed at capital gain tax rate of 15% as she is in 32% tax bracket
15%*(3500-3000)
Tax	75
ans c
There is short term capital loss hence tax saving is
32%*(3080-4000)	-294.4
If any doubt please comment