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answer question 46

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setscechwa/Documents/Act351/McGraw-Hills-Taxation-of-Individuals and Business Entities-2020-Edition nodrm.pdf - + 9 Fit to width Page View All Read aloud L Add notes Long-term capital losses (10,000) 46. Grayson (single) is in the 24 percent tax rate bracket and has sold the following! stocks in 2019: Stock A Stock B Stock C Stock D Stock E Date Purchased 1/23/1995 4/10/2019 8/23/2017 5/19/2009 8/20/2019 Basis $ 7.250 14,000 10.750 5,230 7,300 Date Sold 7/22/2019 9/13/2019 10/12/2019 10/12/2019 11/14/2019 Amount Realized $ 4,500 17,500 15,300 12,400 3,500 a) What is Grayson's net short-term capital gain or loss from these transactions? b) What is Grayson's net long-term gain or loss from these transactions? c) What is Grayson's overall net gain or loss from these transactions? d) What amount of the gain, if any, is subject to the preferential rate for certain capital gains? 47. George bought the following amounts of Stock A over the years: Stock A Stock A Stock A Date Purchased 11/21/1993 3/18/1999 5/22/2008 Number of Shares 1.000 500 Adjusted Basis $24.000 9,000

Answer 1

Net gain or loss for these stocks is as follows:

Description	Date Purchased	Basis	Date Sold	Amount Realized	Capital Gain/(Loss)	Type
Stock A	23-Jan.-1995	$                7,250	22-Jul-2019	$                   4,500	$                (2,750)	Long Term
Stock B	10-Apr.-2019	$              14,000	13-Sep.-2019	$                 17,500	$                 3,500	Short Term
Stock C	23-Aug.-2017	$              10,750	12-Oct.-2019	$                 15,300	$                 4,550	Long Term
Stock D	19-May-2009	$                5,230	12-Oct.-2019	$                 12,400	$                 7,170	Long Term
Stock E	20-Aug.-2019	$                7,300	14-Nov.-2019	$                   3,500	$                (3,800)	Short Term

a)

	Description	Capital Gain/(Loss	Type
	Stock B	$                3,500	Short Term Capital Gain
Less:	Stock E	$              (3,800)	Short Term Capital Loss
	Total	$                 (300)	Short Term Capital Loss

b)

	Description	Capital Gain/(Loss	Type
	Stock A	$              (2,750)	Long Term Capital Loss
Add:	Stock C	$                4,550	Long Term Capital Gain
Add:	Stock D	$                7,170	Long Term Capital Gain
	Total	$                8,970	Long Term Capital Gain

c)

	Description	Capital Gain/(Loss	Type
	Net STCL	$                 (300)	Short Term Capital Loss
Add:	Net LTCG	$                8,970	Long Term Capital Gain
	Total	$                8,670	Net Capital Gain

d)

Grayson's whole amount of net capital gain $8,670 will be subject to a particular assessment rate.