Question 21. 21. Justin had the following transactions in 2015: Sales Price Basi

Question

Question 21. 21. Justin had the following transactions in 2015: Sales Price Basis Purchased Sold ABC Stock $12,000 $5,000 1/1/2010 12/7/2015 DEF Stock $25,000 $15,000 6/12/2007 1/13/2015 GHI Stock $10,000 $12,000 7/3/2011 5/6/2015 JKL Stock $13,000 $10,000 9/6/2014 6/5/2015 MNO Stock $15,000 $19,000 3/16/2013 11/11/2015 Prior year ST Capital Loss Carryforward ($6,500) Prior year LT Capital Loss Carryforward ($4,000) What amount of capital gain is subject to the preferential capital gains rate? (Points : 4) $0 $3,000 $3,500 $7,000 $8,000

Explanation / Answer

Sales Price Basis Purchased Sold TYPE GAIN/LOSS ABC Stock $ 12,000 $ 5,000 01/01/2010 12/07/2015 L $ 7,000 DEF Stock $ 25,000 $ 15,000 06/12/2007 1/13/2015 L $ 10,000 GHI Stock $ 10,000 $ 12,000 07/03/2011 05/06/2015 L $ -2,000 JKL Stock $ 13,000 $ 10,000 09/06/2014 06/05/2015 S $ 3,000 MNO Stock $ 15,000 $ 19,000 3/16/2013 11/11/2015 L $ -4,000 Prior year ST Capital Loss Carryforward ($6,500) ST GAIN 0F 3000 SET OFF Prior year LT Capital Loss Carryforward ($4,000) LT GAIN OF 17000, 10000 SET OFF REMAINING LT CAPITAL GAIN IS $7,000 Ans is d $7,000

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