Aamir has $25,000 of net Sec.1231 gains this year on business assets.In addition,incurred $18,000 of loss on the sale of stock held six months.Aamir will include in his AGI
A)$3,000 short term capital loss and $25,000 ordinary gain.
B)$22,000 net capital gain.
C)$7,000 net capital gain.
D)$7,000 short-term capital gain.

Question

Quizplus · Accepted Answer

Aamir has $25,000 of net Sec.1231 gains, which are treated as long-term capital gains when calculating net capital gains. However, he also incurred a $18,000 short-term capital loss on the sale of stock held for less than one year. As per IRS rules, the net capital gains are calculated by subtracting short-term capital losses from long-term capital gains, which would be $25,000 - $18,000 = $7,000. Therefore, the correct answer is option C) $7,000 net capital gain.

Aamir Has $25,000 of Net Sec