Haneen has a taxable income of $115,000 without consideration of capital gain or loss transactions. She has a short-term capital gain of $18,000, a long-term capital loss of $10,000, and a short-term capital gain of $4,000. Assume no gains or losses are from collectibles or unrecaptured § 1250 property, and Haneen is in the 24% tax bracket.

a. What is the total short-term gain or loss?

b. What is the total long-term gain or loss?

c. What is the carryover amount?

d. Is the gain or loss after netting taxed at the Ordinary or Capital rate?

Question

Business

Ben Colon

25 April, 00:20

Haneen has a taxable income of $115,000 without consideration of capital gain or loss transactions. She has a short-term capital gain of $18,000, a long-term capital loss of $10,000, and a short-term capital gain of $4,000. Assume no gains or losses are from collectibles or unrecaptured § 1250 property, and Haneen is in the 24% tax bracket.

a. What is the total short-term gain or loss?

b. What is the total long-term gain or loss?

c. What is the carryover amount?

d. Is the gain or loss after netting taxed at the Ordinary or Capital rate?

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Answers (1)

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Valentino Rose · Answer 1

The computation is shown below:

a. The total short term gain or loss is

= Short term capital gain + short term capital gain

= $18,000 + $4,000

= $22,000

b. The total long term gain or loss is

Long term loss is $10,000

c. So, the carryover amount is

= $22,000 - $10,000

= $12,000

d. The carryover amount should be reported on the schedule D at ordinal income rates, not the capital rate. Plus the net short term gain contains no special treatment