An investor is in the 33 percent tax bracket and pays long-term capital gains ta

Question

An investor is in the 33 percent tax bracket and pays long-term capital gains taxes of 15 percent. What are the taxes owed (or saved in the case of losses) in the current tax year for each of the following situations? a) Net short-term capital gains of $3,000; net long-term capital gains of $4,000 b) Net short-term capital gains of $3,000; net long-term capital losses of $4,000 c) Net short-term capital losses of $3,000; net long-term capital gains of $4,000 d) Net short-term capital gains of $3,000; net long-term capital losses of $2,000 e) Net short-term capital losses of $4,000; net long-term capital gains of $3,000 f) Net short-term capital losses of $1,000; net long-term capital losses of $1,500 g) Net short-term capital losses of $3,000; net long-term capital losses of $2,000

PLEASE SHOW WORK

answers should be

(1,000)(.15) = 150 saved

(4000-3000)(.33) = 333 saved

(3,000)(.15)= 450 saved

(1,000)(.33) = 330 owed

(1000)(.33) = 330 saved

(1500)(.15) = 225 owed

(3,000)(.33)= 990 savings

Explanation / Answer

(990.00)

An investor is in the 33 percent tax bracket and pays long-term capital gains taxes of 15 percent. What are the taxes owed (or saved in the cases of losses) in the cur- rent tax year for each of the following situations? LT ST Net Gain/Loss Tax Due 1. a) Net short-term capital gains of $3,000; net long-term capital gains of $4,000 4,000.00 3,000.00 7,000.00 LTG+STG, so LT 4000 taxed at 15% and ST 3000 taxed at 33% 1,590.00 2. b) Net short-term capital gains of $3,000; net long-term capital losses of $4,000 (4,000.00) 3,000.00 (1,000.00) LTL + STG, LT > ST so tax net at 15% (150.00) 3. c) Net short-term capital losses of $3,000; net long-term capital gains of $4,000 4,000.00 (3,000.00) 1,000.00 LTG + STL, LT >ST so tax net at 15% 150.00 4. d) Net short-term capital gains of $3,000; net long-term capital losses of $2,000 (2,000.00) 3,000.00 1,000.00 LTL+STG, ST >LT so tax net at 33% 330.00 5. e) Net short-term capital losses of $4,000; net long-term capital gains of $3,000 3,000.00 (4,000.00) (1,000.00) LTG +STL, ST >LT so tax net at 33% (330.00) 6. f) Net short-term capital losses of $1,000; net long-term capital losses of $1,500 (1,500.00) (1,000.00) (2,500.00) LTL + STL, so tax net at 33% (825.00) 7. g) Net short-term capital losses of $3,000; net long-term capital losses of $2,000 (2,000.00) (3,000.00) (5,000.00) LTL + STL, so tax net at 33% limit to 3000

(990.00)

Use the following Rules LTG + STG = LT taxed at capital gain rate, ST taxed at ordinary Rate LTL + STG = if ST > LT, then tax at ordinary. If LT>St, then tax at capital rate LTG + STL = if LT > ST, then capital. If ST > LT then 3000 loss limit at ord rate. LTL + STL = 3000 limit to all losses against ordinary income. Carryovers are ST first, then LT

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