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Justin had the following transactions in 2015: What amount of capital gain is su

ID: 2486006 • Letter: J

Question

Justin had the following transactions in 2015:

What amount of capital gain is subject to the preferential capital gains rate?

(Points : 4)       

$0

$3,000

$3,500

$7,000

$8,000

Sales Price Basis Purchased Sold ABC Stock $12,000 $5,000 1/1/2010 12/7/2015 DEF Stock $25,000 $15,000 6/12/2007 1/13/2015 GHI Stock $10,000 $12,000 7/3/2011 5/6/2015 JKL Stock $13,000 $10,000 9/6/2014 6/5/2015 MNO Stock $15,000 $19,000 3/16/2013 11/11/2015 Prior year ST Capital Loss Carryforward ($6,500) Prior year LT Capital Loss Carryforward ($4,000)

Explanation / Answer

Sale price Basis Purchased sold long term short term                     capital gain/(loss) ABC Stock 12000 5000 1/1/2010 12/7/2015 7000 DEF Stock 25000 15000 6/12/2007 1/13/2015 10000 GHI Stock 10000.00 12000.00 7/3/2011 5/6/2015 -2000 JKL Stock 13000.00 10000.00 9/6/2014 6/5/2015 3000.00 MNO Stock 15000.00 19000.00 3/16/2013 11/11/2015 -4000 Prior year ST Capital loss carryforward -6500.00 Prior year LT Capital loss carryforward -4000.00 11000 3000 Total capital gains ( 11000 + 3000) 14000.00 Less Prior year ST Capital loss carryforward -6500.00 Prior year LT Capital loss carryforward -4000.00 capital gain taxable 3500.00 hence 3rd option is correct