Question

You are in the 28% income tax bracket and pay long-term capital gains taxes of 15%. What are the taxes owed or saved in the current year for each of the following sets of transactions?

1. You buy 100 shares of ZYX for $10 and after seven months sell it on December 31, 201X, for $23. You buy 100 shares of WER for $10 and after 15 months sell it on December 31, 201X, for $7. You buy 100 shares of DFG for $10 and after nine months, on December 31, 201X, it is selling for $15]

B. You buy 100 shares of ZYX for $60 and after seven months sell it on December 31, 201X, for $37. You buy 100 shares of WER for $60 and after 15 months sell it on December 31, 201X, for $67. You buy 100 shares of DFG for $60 and after nine months sell it on December 31, 201X, for $76.

3. On January 2, 201X, you buy 100 shares of ZYX for $40 and sell it for $31 after 22 months. On January 2, 201X, you buy 100 shares of WER for $40 and sell it for $27 after 15 months. On January 2, 201X, you buy 100 shares of DFG for $40 and sell it for $16 after 18 months.

4. On January 2, 201X, you buy 100 shares of ZYX for $60. On October 2, 201X, you sell 100 shares of ZYX for $40. On October 10, 201X, you purchase 100 shares of ZYX for $25.

Answer 1

														('In $)
S.no	Company	BUY			SELL			Profit/ (Loss)	Period of Holding (months)	Length of Ownership	Type of Capital Gain	Tax Rate		Capital Gain Tax
		Nos	Price	Total	Nos	Price	Total					Federal	State*
A	ZYX	100	10	1,000	100	23	2,300	1,300	7	Less than a year	Short Term Capital Gain	28%	9.30%	484.90
	WER	100	10	1,000	100	7	700	-300	15	More than a year	Long Term Capital Loss	15%	9.30%	Note: 2
	DFG	100	10	1,000	100	15	1,500	500	9	Less than a year	Short Term Capital Gain	28%	9.30%	186.50
B	ZYX	100	60	6,000	100	37	3,700	-2,300	7	Less than a year	Short Term Capital Loss	28%	9.30%	Note: 2
	WER	100	60	6,000	100	67	6,700	700	15	More than a year	Long Term Capital Gain	15%	9.30%	170.10
	DFG	100	60	6,000	100	76	7,600	1,600	9	Less than a year	Short Term Capital Gain	28%	9.30%	596.80
C	ZYX	100	40	4,000	100	31	3,100	-900	22	More than a year	Long Term Capital Loss	15%	9.30%	Note: 2
	WER	100	40	4,000	100	27	2,700	-1,300	15	More than a year	Long Term Capital Loss	15%	9.30%	Note: 2
	DFG	100	40	4,000	100	16	1,600	-2,400	18	More than a year	Long Term Capital Loss	15%	9.30%	Note: 2
D	ZYX	100	60	6,000	100	40	4,000	-2,000	10	Less than a year	Short Term Capital Loss	28%	9.30%	Note: 2

Notes

1) * Let us assume state as San Francisco, CA

2) Such Capital Losses can be adjusted against Capital Gains for such year up to limit of such gains. In addition to such deduct $3,000 of final net short- or long-term losses against other types of income for that year and must carry forward any remaining balance.