Ms. Beal recognized a $42,400 net long-term capital gain and a $33,000 net short-term capital loss this year. What is her current net income tax cost from her capital transactions if her marginal rate on ordinary income is 37%?

Question

Quizplus · Accepted Answer

The net capital gain is $42,400 - $33,000 = $9,400. Long-term capital gains are taxed at a lower rate than ordinary income. Assuming a 20% tax rate on long-term capital gains, the tax cost is $9,400 * 20% = $1,880.

Ms Beal Recognized a $42,400 Net Long-Term Capital Gain and a $33,000