Question

Roger (who is single) has the following activity for the year;

Sold personal car for $1,000 loss. Held the car for 2 years.

Sold principal residence for $300,000 gain. Lived and used the residence as his principal residence for the last 3 years.

Sold Spice stock for $2,000 gain. Held the stock for 6 months.

Sold antique record player for $4,000 gain. Held the record player for 10 years.

Sold Basil stock for $3,000 loss. Held the stock for 3 years.

Sold business machine for $2,000 gain. He held the machine for 1 year.

He sold Pesto stock for $5,000 loss. Held the stock for 6 days.

What Roger’s tax liability resulting from these transactions assuming his long term capital gains are taxed at 15% and his marginal rate is 33%?

Answer 1

Long term capital gains or loss is applicable for assets held over a Year
	Capital Gains	Marginal gain/loss
Sold car	-1000
Sold residence	300000
Sold spice stock	2000
Sold antique record	4000
Sold Basil stock	-3000
Sold Business Machine	2000
Sold Pesto stock		-5000
Total	304000	-5000
Capital gains tax	45600
Marginal tax		-1650
Total tax	43950