Question

Assume the following sales took place during 2020 for a variety of individual capital assets for Ron (all normal capital assets with gains subject to 0%, 15% or 20% tax rates):

Property Purchase Date	Property Sale Date	Adjusted Basis	Sales Proceeds	Gain/Loss	Character of Gain/Loss
12/6/2020	12/9/2020	$1,000	$1,060	$60	Short term
1/7/2000	6/15/2020	$5,000	$6,200	$1,200	Long term
11/6/2013	8/20/2020	$5,000	$4,200	-$800	Long term
5/1/2020	10/31/2020	$2,500	$2,200	-$300	Short term
6/8/2011	3/22/2020	$8,600	$10,000	$1,400	Long term
7/10/1999	1/19/2020	$2,000	$4,100	$2,100	Long term
3/16/2016	3/16/2020	$5,300	$6,000	$700	Long term

A prior year long-term capital loss will be carried over into this year in the amount of ($4,000).

-Explain the tax rate(s) that would apply to your end result or if any part of your end result is deducible against ordinary income.

-(have already filled out 8949) move information to Schedule D

Answer 1

As Ron is an Individual if his long term capital gain limit will be as follows:

Up to $ 40000= 0 %

$40000-$441450=15℅

$441450 =20 %

In the given sum

Short Term Capital loss=$300-$60=$240

Long term Capital Gain=$1200-$800-$300+$1400+$2100+$700=$4300

Long term capital gain after deducting short term capital loss:$4300-$240=$4060

Net long term capital gain=Long term capital gain after deducting short term capital loss- prior year long term capital loss carried forward

=$4060-$3000

=$1060

Note:Even the prior period long term capital loss is $4000 but it can set off only upto $3000 in Current year(2020). The $1000 can be carried forward in the next year 2021.

Conclusion:As the Ron Long term capital gain Income is only $ 1060 the tax rate which would be applied is 0%(zero)

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