Question

Grayson (single) is in the 24 percent tax rate bracket and has sold the following stocks in 2019: (Loss amounts should be indicated by a minus sign.)
Description Date Purchased Basis Date Sold Amount Realized
Stock A 1/23/1995 $7,850 7/22/2019 $4,980
Stock B 4/10/2019 15,200 9/13/2019 18,970
Stock C 8/23/2017 12,250 10/12/2019 17,340
Stock D 5/19/2009 5,710 10/12/2019 13,300
Stock E 8/20/2019 7,720 11/14/2019 3,800

Required:
a. What is Graysonâs net short-term capital gain or loss from these transactions?
b. What is Graysonâs net long-term gain or loss from these transactions?
c. What is Graysonâs overall net gain or loss from these transactions?

Answer 1

Answer: a. -$150 b. $9810 c. $9660

Explanation:

Stock B and E were chosen as the short term for the holding period while stock A, C, D were chosen as long term for the holding period because the time duration is longer.

For question (a), Grayson's net short-term capital loss from these transactions was -150.

For question (b), Grayson's net long-term gain from these transactions was $9810.

For question (c), Grayson's overall net gain from these transactions was:

= $9810 - $150

= $9660

Kindly check the attached document for further analysis.