Capital Gain Rules and Tax Calculations
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You are in the 28% income tax bracket and pay long-term capital gains taxes of 15%. What are the taxes owed or save in the current year for each of the following sets of transactions
a) You buy 100 shares of ZYX for $10 and after seven months sell it on 12/31,200x, for $23. You buy 100 shares of WER for $10 and after 15 months sell it on 12/31, 200x, for $7. You buy 100 shares of DFG, for $10 and after 9 months, on 12/31/200x, it is selling for $15.
b) You buy 100 shares of PYX for %60 and after 7 months sell it on 12/31,200y, for $37. You buy 100 shares of WER for $60 and after 15 months sell it on 12/31/200y, for $67. You buy 100 shares of DFG for $60 and after 9 months sell it on 12/31/200y. For $76.
c) On 1/2/200x, you buy 100 shares of ZYX for $40 and sell it for $31 after 21 months. On 1/2/200x, you buy 100 shares of WER for $40 and sell it for $27 after 15 months. On 1/2/200x, you buy 100 shares of DFG for $40 and sell it for $16 after 18 months.
d) On 1/2/200x, you buy 100 shares of ZYX for $60. ON 10/2/200x, you sell 100 shares of ZYX for $40. On 10/10/200x, you purchase 100 shares of ZYX for $25.
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Solution Summary
For the four groups of capital gain transactions, the solution explains how to offset and combine the gains and losses for calculation of the tax amount due.
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ST: short term capital gain/loss
LT: long term capital gain/loss
Group A
ST: ZYX 2300 -1000 = 1300
LT: WER 700 - 1000 = (300)
ST: DFG 1500 - 1000 = 500
LT losses offset ST gains. The net amount of $1500 gain is taxed at ordinary rates. Tax is ...
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