63. During 2019, your clients, Mr. and Mrs. Howell, owned the following investment assets:

Investment Assets Date Acquired Purchase Price Broker’s Commission Paid at Time of Purchase 300 shares of IBM common 11/22/2016 $ 10,350 $ 100 200 shares of IBM common 4/3/2017 43,250 300 3,000 shares of Apple preferred 12/12/2017 147,000 1,300 Investment Assets Date Acquired Purchase Price Broker’s Commission Paid at Time of Purchase 2,100 shares of Cisco common 8/14/2018 52,500 550 420 shares of Vanguard mutual fund 3/2/2019 14,700 No-load fund*
*No commissions are charged when no-load mutual funds are bought and sold.
Because of the downturn in the stock market, Mr. and Mrs. Howell decided to sell most of their stocks and the mutual fund in 2019 and to reinvest in municipal bonds. The following investment assets were sold in 2019:
Investment Assets Date Sold Sale Price Broker’s Commission Paid at Time of Sale 300 shares of IBM common 5/6 $
13,700 $
100 3,000 shares of Apple preferred 10/5 221,400 2,000 2,100 shares of Cisco common 8/15 63,250 650 451 shares of Vanguard mutual fund 12/21 15,700 Noload fund*
*No commissions are charged when no-load mutual funds are bought and sold.
The Howells’ broker issued them a Form 1099-B showing the sales proceeds net of the commissions paid. For example, the IBM sales proceeds were reported as $13,600 on the Form 1099-B they received.
In addition to the sales reflected in the table above, the Howells provided you with the following additional information concerning 2019:
The Howells received a Form 1099-B from the Vanguard mutual fund reporting a $900 long-term capital gain distribution. This distribution was reinvested in 31 additional Vanguard mutual fund shares on 6/30/2019.
In 2014, Mrs. Howell loaned $6,000 to a friend who was starting a new multilevel marketing company called LD3. The friend declared bankruptcy in 2019, and Mrs. Howell has been notified she will not be receiving any repayment of the loan.
The Howells have a $2,300 short-term capital loss carryover and a $4,800 long-term capital loss carryover from prior years.

The Howells did not instruct their broker to sell any particular lot of IBM stock.
The Howells earned $3,000 in municipal bond interest, $3,000 in interest from corporate bonds, and $4,000 in qualified dividends.
Assume the Howells have $130,000 of wage income during the year.

a. Go to the IRS website (www.irs.gov) and download the most current version of Form 8949 and Form 1040 Schedule D. Use Form 8949 and page 1 of Schedule D to compute net long-term and short-term capital gains. Then, compute the Howells’ tax liability for the year (ignoring the alternative minimum tax and any phase-out provisions) assuming they file a joint return, they have no dependents, they don’t make any special tax elections, and their itemized deductions total $25,000. Assume that asset bases are reported to the IRS.

b. Are there any tax planning recommendations related to the stock sales that you should have shared with the Howells before their decision to sell?

c. Assume the Howells’ short-term capital loss carryover from prior years is $82,300 rather than $2,300 as indicated above. If this is the case, how much short-term and long-term capital loss carryover remains to be carried beyond 2019 to future tax years?