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During 2016, Chester had the following transactions involving capital assets: Gain on the sale of an arrowhead collection (acquired as an investment at different times
During 2016, Chester had the following transactions involving capital assets:
Gain on the sale of an arrowhead collection (acquired as an investment at different times but all pieces have been held for more than one year) | $6,000 |
Loss on the sale of IBM Corporation stock (purchased 11 months ago as an investment) | (4,000) |
Gain on the sale of a city lot (acquired 5 years ago as an investment) | 2,000 |
a. Indicate the tax treatment for each item.
Gain on the sale of an arrowhead collection | (Long-term capital gain, Short-term capital gain, or non taxable) |
Loss on the sale of IBM Corporation stock | Short-term capital loss |
Gain on the sale of a city lot | Long-term capital gain |
Overall, Chester has a long-term capital gain of $X . However, $2000 of this gain is from collectibles, which are taxed at a maximum rate of (28%, or 0%)
b. If Chester is in the 33% bracket, how much income tax results?
$X
c. If Chester is in the 15% bracket, how much income tax results?
$X
I need help figuring out the Bold. Please show how you got your answer. Thank you
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