Netting Capital Gains and Losses
Response to the following problem:
In each of the following cases, use the netting process between groups to determine the taxpayer's net capital gain and the tax rate paid on such gain.
a. A $2,000 loss on the sale of a capital asset held six months; a $9,000 gain on the sale of a capital asset held for three years. The taxpayer is in the 35% tax bracket.
b. Same as Part a., except that the taxpayer is in the 15% tax bracket.
c. A $6,000 gain on the sale of a capital asset held nine months; a $5,000 gain on the sale of a capital asset held four years. The taxpayer is in the 28% tax bracket.
d. Same as Part c., except that the taxpayer is in the 10% tax bracket.