Natalie expects her ordinary income to exceed $600,000 putting her in the 37 marginal percent tax bracket for 2019. So far this year, she has a $5,000 short-term capital loss. As of June 1, she is holding 1,000 shares of Dritco stock purchased on June 15 of last year for $15,000. The market value of the stock as of May 21 is $27,000. Lately the value of the stock has been decreasing and Natalie feels it may go down by $1,000 or so in the next month and probably stabilize thereafter. Advise Natalie as to the various courses of action she might take

Q: Joanna, age 44, defers $24,000 in a qualified Solo § 401(k) plan in 2020. a. What amount must be…

A: Concept used : The deferral limit for 2020 is $19,500.

Q: Abby, a single taxpayer, purchased 10,000 shares of § 1244 stock several years ago at acost of $20…

A:

Q: Natasha gets stake in Big Red Airline Corporation from her Uncle Tony's inheritance. On August 2,…

A: Basis of stock for Sonya is $2,000 because it's based on the value on the date of owner's death…

Q: In 2021, Elko, Inc. has $200,000 in accumulated earnings and profits and $(180,000) in current…

A: In the given question we are provided with the data of Elko Inc. which is having accumulated…

Q: On October 30, 2019, Tess bought 500 shares of ACTS stock for ₱ 640.00 per share. On November 15,…

A: The gain or loss on the investment can be computed by finding the difference between sales price…

Q: This year Lloyd, a single taxpayer, estimates that his tax liability will be $10,000. Last year, his…

A: Tax: It is the compulsory payment that arises on the corporation, individual, and the organisation…

Q: Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of Microsoft…

A: A capital gain is an increase in the value of a capital asset that is considered realized when the…

Q: Linda and Don are married and file a joint return. In 2020, they received $12,000 in Social Security…

A: The following joint income return is calculated for Linda and Don.

Q: What are Jenna’s tax consequences in 2019?       b. 2020?             c. What is Jenna's basis in…

A: The deduction of the partner’s distributive share of partnership losses (including capital losses)…

Q: Abby, a single taxpayer, purchased 10,000 shares of § 1244 stock several years ago at a cost of $20…

A: Long term capital loss:   A long-term capital gain or loss is the gain or loss stemming from the…

Q: Phil and Susan Hammond are married taxpayers filing a joint return. The couple have two dependent…

A: In Part C, it is been mentioned that we have to assume that the stock sale information was reported…

Q: Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of Microsoft…

A: Specific identification method: It is a method to track the purchase cost of the items sold…

Q: Sean, who is single, received social security benefits of $8,480, dividend income of $12.610, and…

A: In the given scenario, the combined gross income for Sean is :  = Social Security benefit + Dividend…

Q: Nadine bought 100 shares of OAK stock for $30 a share on April 30, 2019. On July 1, 2020, she…

A: Answer with all calculation are as follows.

Q: Christina, who is single, purchased 460 shares of Apple Inc. stock several years ago for $20,240.…

A: A deductible is an expense that an individual taxpayer or a business can deduct from adjusted gross…

Q: What should he do before the end of 2020?

A:

Q: On April 10, 2019, Shen paid $48,650 for corporate stock. Shen died on July 14, 2021, when the stock…

A: Given data, Purchase price of stock =$48,650 On July 14, 2021, when the stock was worth $29,190 For…

Q: In 2020, Nina contributes 6 percent of her $143,000 annual salary to her 401(k) account. She expects…

A: Calculation of future Value: FV=PV(1+r)^n PV=8,580 (6%*143,0000) r =7% n=25 FV=8,580(1+7%)^25…

Q: Jane has $2,000 of dividend income and $3,000 of capital gains in her equity investment in 2020. Her…

A: Jana has earned total: 2000+3000=5000Since the dividend tax credit is not available for tax…

Q: During the financial year 2020/2021, Jessy made a capital gain of $33,000 on the sale of her shares…

A: The rise in the worth of a financial asset when it is sold is referred to as a capital gain.…

Q: sabel, a calendar year tax payer, uses the cash method of accounting for her soul proprietor ship.…

A: SOLUTION- AFTER TAX COST IS THE AMOUNT OF EXPENDITURE THAT IS INCURRED DURING THE YEAR AND THAT…

Q: Phil and Susan Hammond are married taxpayers filing a joint return. The couple have two dependent…

A: On Form 8949 first part is related to short term capital gain and part 2 on page 2 is related to…

Q: Melissa had a $200,000 long-term capital gain when she sold some of her Bitcoin in 2021, bringing…

A: When a capital asset is sold, the phrase capital gain refers to the rise in its value. Simply put, a…

Q: Determine Abby's total AGI under both options for the current year and next year.

A: AGI the Adjusted Gross Income can be defined as the result of the deduction of specific deductions…

Q: Sam receives 100 stock options in XYC Co, which is a public company. He was granted the stock…

A: Sam receives 100 Stock Options in XYC Co. Granted stock option in 2016  Fair value in 2016 = $5…

Q: At the start of the 2019 tax year, Franny had $40,000 trading stock on hand in her café. Throughout…

A: The transactions of the company will be recorded first in the company's books which is called as…

Q: Cecelia and Doug will file a joint return. During the year, they received dividends from a mutual…

A: Taxable income (wages) = $86,550 Cecelia and Doug file joint return  They receive $1500 as an…

Q: For 2019, Ashley has gross income of $38,350 and a $5,000 long-term capital loss. She claims the…

A: Determine the amount that person A carries over to 2020.

Q: James, who is in the 35 percent marginal tax bracket with a 15 percent tax rate on dividends, owns…

A: Solution - Requirement A- James income falls under 35% bracket and Dividend income will be taxed at…

Q: Amira and Tay each started with $200,000. They retired, and both took out $6,500 of their money at…

A:

Q: For the current tax year, Morgan had $25,000 of ordinary income. In addition, he had an $1,900…

A: Capital loss: The loss that occurs when selling long-term assets and short-term assets. This loss is…

Q: Charles and Joan Thompson file a joint return. In 2019 they had taxable income of $92,370 and paid…

A: All amounts are in dollar ($).

Q: 4. Sandi, files her 2020 taxes as head of household taking her two children, ages 14 and 11, as…

A: Tax is the compulsory payment that a taxpayer needs to pay.

Q: David Ashley Parker, of Powder Springs, CO, is in the 22 percent marginal tax bracket and is…

A: Working note:

Q: I just need the answer to the question that is underlined, please!  Samuel, age 32, loses his job…

A: Federal income tax is a tax on a range of certain kinds of income. Taxes are calculated and paid by…

Q: In the current year, Megan, who is single, sells stock valued at $48,000 to Brooke for $13,000.…

A: (a) Determination of taxable gift Cost of stock $48,000   Sales to Brooke ($13,000)   Taxable…

Q: This year Lloyd, a single taxpayer, estimates that his tax liability will be $12,400. Last year, his…

A: Solution:- Calculation of the amount of his underpayment penalty if federal short-term rate is 5…

Q: Suppose that in 2018 the price index was 120 and Ifikile purchased R35 000 worth of bonds. One year…

A: Bond Value in 2019           39,725.00 Bond Value in 2018           35,000.00 Tax Rate = 40%

Q: ammond are married taxpayers filing a joint return. The couple have two dependent children. Susan…

A: Adjusted Gross Income is the term used in the calculation of gross income for all taxable sources…

Q: Melissa sold some of her Bitcoin in 2021 for a $200,000 long-term capital gain, bringing her total…

A: When a capital asset is sold, the phrase capital gain refers to the rise in its value. Simply put, a…

Q: Karen purchased 100 shares of X-Corporation Stock in 2020. X-Corporation is registered and…

A: Working :-                                         Number of  shares  purchased by…

Q: Amy is single with a salary of $50,000. She has been offered a new position that will raise her…

A: Existing Salary of Amy = $50,000New Salary of Amy = $53,000Raise in Salary = $53,000 - $50,000 =…

Q: Theresa and Oliver, married filing jointly, and both over 65 years of age, have no dependents. Their…

A: Adjusted Gross Income: Adjusted Gross Income (AGI) is characterized as gross pay short acclimations…

Q: In 2020, Kathleen Tweardy incurs $30,000 of interest expense related to her investments. Her…

A: Capital gain is the income earned on the sale of capital asset.

Q: On November 15, 2019, Tim, a cash basis taxpayer, gave his Daughter Nancy 1000 shares of JP Morgan…

A: Cost per Share for Tim=$60,0001,000=$60 per share. Fair Market Value on Date of Gift=$46 per share…

Q: Sean, who is single, received social security benefits of $8,000, dividend income of $13,000, and…

A: Given information is: Social security benefits = $8000 Dividend Income = $13000 Interest Income =…

Q: bby, a single taxpayer, purchased 10,000 shares of § 1244 stock several years ago at a cost of $20…

A: As per section 1244, ordinary loss is allowed up to $50,000 for individual returns and up to…

Q: Abby’s goal is to minimize her AGI for the two years, determine whether she should sell all of her…

A: Given information is: Abby, a single taxpayer, purchased 10,000 shares of § 1244 stock several years…

Q: In 2020, Simon, age 12, has interest income of $5,820 on funds he inherited from his grandmother and…

A: Net unearned income $5,820 Less: Standard deduction  ($1,100) Gross unearned income $4,720…

Q: In 2020, Courtney, 16 and a dependent of her mother, had earned income of $4,000 and interest income…

A: Taxable income refers to the income which is subject to tax as per the government's regulations. All…

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.