Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of Microsoft common stock over the years: Date Purchased Shares Basis 7/10/2011 430 $ 14,190 4/20/2012 330 12,804 1/29/2013 530 14,098 11/02/2015 280 9,016 If Dahlia sells 890 shares of Microsoft for $47,170 on December 20, 2021, what is her capital gain or loss in each of the following assumptions? a. She uses the FIFO method. Capital gains? b. She uses the specific identification method and she wants to minimize her current-year capital gain. Capital gains?

Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of Microsoft common stock over the years: Date Purchased Shares Basis 7/10/2011 430 $ 14,190 4/20/2012 330 12,804 1/29/2013 530 14,098 11/02/2015 280 9,016 If Dahlia sells 890 shares of Microsoft for $47,170 on December 20, 2021, what is her capital gain or loss in each of the following assumptions? a. She uses the FIFO method. Capital gains? b. She uses the specific identification method and she wants to minimize her current-year capital gain. Capital gains?

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter16: Property Transactions: Capital Gains And Losses

Section: Chapter Questions

Problem 1RP

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Question

Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of Microsoft common stock over the years:

Date Purchased	Shares	Basis
7/10/2011	430	$ 14,190
4/20/2012	330	12,804
1/29/2013	530	14,098
11/02/2015	280	9,016

If Dahlia sells 890 shares of Microsoft for $47,170 on December 20, 2021, what is her capital gain or loss in each of the following assumptions?

a. She uses the FIFO method.

Capital gains?

b. She uses the specific identification method and she wants to minimize her current-year capital gain.

Capital gains?

Definition Definition Increase in the value of a capital asset and the amount that is realized when the asset is sold off. A capital gain may be short-term or long-term depending on the tenure for which the asset is held.

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