Question

Victor is a single taxpayer in the 24% marginal tax bracket. In 2019, he sold stock shares for a long-term capital gain of $8,500. He also sold some financial services stock for a long-term capital loss of $2,000. In addition, he sold the home that he had lived in for the past 3 years and experienced a $15,000 gain on the house.

1. He has a net taxable long-term capital_____ (fill gain or loss in this blank) for the year of 2019.

2. The net taxable long-term capital gain (or loss) is $___ . (fill an integer without “thousand separators” in this blank).

3. He will pay (or save) $______ in taxes as a result of these transactions. (fill an integer without “thousand separators” in this blank).

Answer 1

As per the law, long term capital loss is adjusted from the log term capital gain and tax is calculated accordingly for the tax purpose

1.

Net taxable long term capital is Gain

2.

Overall, long term gain as loss is adjusted and the long term capital gain is $21,500

ITEMS	GAIN / LOSS
long term capital gain	$8,500
long term capital loss	($2,000)
amount adjusted	$6,500
long term capital gain as house sold after 3 years	$15,000
Net capital long term capital gain	$21,500

3.

Tax impact on the Net capital long term capital gain $21,500 is at the rate of 24% marginal tax bracket is $5,160 which is determined as ($21,500 x 24%)