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Lefty completes the following capital asset transactions. By how much does Lefty’s AGI increase as a...

Lefty completes the following capital asset transactions. By how much does Lefty’s AGI increase as a result of these gains/losses? Long-term gain Short-term gain Short-term loss $10,000 4,000 25,000

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Answer #1

Lefty's AGI will not increase as a result of these gains/losses.

As there is a short term capital loss of $ 25000 which will be set- off first against short term gain and then against long term gain and even if loss remains can be sett-off same year up to $3000 against other sources of income and rest carried forward.

As in this case short term loss of $14000 can be set-off against short term and long term gain and so AGI doesn't increases from these gains/losses.

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