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Below is a table with four different scenarios for a taxpayer who opts to sell several different types of stock throughout the year. Assume that
Below is a table with four different scenarios for a taxpayer who opts to sell several different types of stock throughout the year. Assume that all ordinary income for the taxpayer is taxed at a flat tax rate of 22%. In contrast, his long-term capital gains tax rate is 15%. His only income outside the transactions with the stock is $100,000 or ordinary income from his salary.( YEAR 2023)
Scenario 1 | Scenario 2 | Scenario 3 | Scenario 4 | |
ST capital gain | $4,000 | $4,000 | $4,000 | |
ST capital loss | $7,000 | $7,000 | $10,000 | |
LT capital gain | $9,000 | $9,000 | $9,000 | |
LT capital loss | $5,000 | $5,000 | $5,000 |
Fill in the blank:
- The total amount of taxes saved during the current year because of the capital losses in Scenario 1 is $_______.
- The additional amount of tax due the taxpayer must pay in total this year because of short-term capital gains in Scenario 2 is $_______.
- The additional amount of tax due the taxpayer must pay in total this year because of the long-term capital gains in Scenario 2 is $_______.
- The total change in tax due for the taxpayer because of the gains and losses in Scenario 3 is $_______.
- The total change in tax due for the taxpayer because of the gains and losses in Scenario 4 is $_______.
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