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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?

Answer :

Explanation:

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

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