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For the current year, Sarah has salary of 50,000. In addition, she has the following capital...

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Accounting

For the current year, Sarah has salary of 50,000. In addition,she has the following capital transactions:

Long-term capital gain(15%)         12,000

Short-term capitalgain                    8,000

Long-term capital loss(28%)         (4,000)

Short-term capitalloss                   (10,000)

What is her taxable income for the year? She has a short-termcapital loss carry-over of 5,000 from the previous year. Thestandard deduction amount for her is 12,000

Question 6 options:

37,000

39,000

49,000

59,000

None of the above

Answer & Explanation Solved by verified expert
3.8 Ratings (389 Votes)

Particulars Short-term Long-term
Collectible		 Long-term
other
Gains $            8,000 $          12,000
Losses $        (15,000) $          (4,000) $                  -  
Net gain / (loss) $          (7,000) $          (4,000) $          12,000
Less: long-term capital loss $            4,000 $          (4,000)
Less: short-term capital loss $            7,000 $                  -   $          (7,000)
Balance $                  -   $                  -   $            1,000

Short-term capital losses include short-term capital loss carryover. Taxable income of taxpayer is:

Taxable income Amount
Salary $          50,000
Capital gains $            1,000
Gross income $          51,000
Deductions:
Standard deduction $        (12,000)
Taxable income $          39,000

Thus, taxable income is $39,000. Please rate the answer.
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