Question

This year, Jennifer sold several shares of stock held for investment. The following is a summary of her capital transactions for 2017:

Acquired	Sold This Year	Selling Price	Cost
09/25/2017	12/2017	$800	$1,000
02/15/2017	07/2017	2,200	1,750
06/25/2013	08/2017	3,500	2,300
12/28/2015	06/2017	750	900

What are the amounts of Jennifer's capital gains (losses) for this year?

A)

NLTG	NSTG
$ 1,300	$0

B)

NLTG	NSTG
$     850	$450

C)

NLTG	NSTG
$ 1,050	$250

D)

NLTG	NSTG
($1,050)	($250)

Answer 1

Gains/lossedd arising from shares held for less than one year are considered as Short-Term Gain / Loss while if these are held for over a year, it is conisdered as Long-Term.

The first two transactions in the questions qualify for Short-Term as they are held for less than a year while the remaining two qualify for Long-Term.

The first transactions entailed a loss of $200 (Selling Price - Cost Price = $800 - $1,000)

The second transaction entailed a gain of $450 ($2,200 - $1,750)

Therefore cumulative Short-Term Gain of $250

The third transaction entailed a gain of $1,200 ($3,500 - $2,300)

The Fourth transaction entailed a loss of $150 ($750 - $900)

Therefore cumulative Long-Term Gain of $1,050

The correct answer is therefore C.