Troy has the following gains and losses from sales of capital assets during the current year. What is the effect of the capital asset transactions on his taxable income? Explain, and show any calculations.
Short-term capital gain $ 7,800
Short-term capital loss 9,000
Long-term capital gain 5,400
Long-term capital loss 2,100
Troy has a net short-term capital loss of $1,200 and a net long-term capital gain of $3,300. Because the short-term and long-term positions are opposite, the two positions are netted, resulting in a $2,100 net long-term gain. The $2,100 long-term capital gain is added to gross income, although it is taxed at 15% (5% if he is in the 10% or 15% tax rate bracket)
Short-term capital gain $ 7,800
Short-term capital loss (9,000) $ (1,200)
Long-term capital gain $ 5,400
Long-term capital loss (2,100) 3,300
Net long-term capital gain $ 2,100
