Kendrick, who has a 33% marginal tax rate, had the following results from transactions during the year: $$\begin{array} { |l | r| }
\hline \text { Collectibles gain } & \$ 20,000 \
\hline \text { Short-term capital loss } & 4,000 \
\hline \text { Long-term capital gain } & 8,000 \
\hline
\end{array}$$ After offsetting the STCL, what is (are) the resulting gain(s)?

Question

Kendrick, who has a 33% marginal tax rate, had the following results from transactions during the year: $$\begin{array} { |l | r| } 
\hline \text { Collectibles gain } & \$ 20,000 \
\hline \text { Short-term capital loss } & 4,000 \
\hline \text { Long-term capital gain } & 8,000 \
\hline
\end{array}$$ After offsetting the STCL, what is (are) the resulting gain(s)?

Quizplus · Accepted Answer

The short-term capital loss of $4,000 is first offset against the collectibles gain of $20,000, resulting in a net collectibles gain of $16,000. The remaining long-term capital gain of $8,000 is not affected by the offset.

Kendrick, Who Has a 33% Marginal Tax Rate, Had the Following