Question

During the year, Tamara had capital transactions resulting in gains (losses) as follows:

• Sold stock in ABC Company (acquired two years ago) ($1,500) • Sold collectible coins (held for more than one year) 2,000

• Sold stock in XYZ Company (acquired six months ago) (4,100)

• Sold stock in LMN Company (acquired three years ago) 500 Determine Tamara's net capital gain or loss as a result of these transactions.

As a result of these transactions, Tamara has a of $ and a of $ . Overall, Tamara has a net of $

Answer 1

Solution

(a) Tamara Overall short term Capital Loss of $4100

but for NET Short term Capital loss , Short term capital loss adjuested to long term capital gain

Net Short term Capital gain

= Loss $4100 +($2000-$1500+$500) = Loss $4100+long term gain $1000 =Loss $3,100

Short term capital gain or Loss arised if the Holding period of Stock is Less then one year.

(b) Is the amount of her overall net gain or loss limited this year

Answer : Yes

ther is a limit on Claiming federal income Tax deductions Both Long term And short term Losses.

(c)Limits for claiming Federal income tax deductions

in general Maximum deduction is $3000 from Other Income

if the tax payer is married and filing seperalty then the deduction is limited to $1500 for Both Short term And Long term Losses