Question

Mishka sold the following stocks in 2021: 200 shares of Dearborn Investments, purchased on May 15, 2020, for $3,820 and sold on January 9, 2021, for $5,185; and 40 shares of State Street Investments, purchased on November 7, 2018, for $12,365 and sold on March 29, 2021, for $9,025. What are the pre-net amounts and nature of the gains (losses) on the sale of these transactions on Mishka’s 1040 return for 2021?

Answer 1

The pre-net amounts and nature of the gains (losses) on the sale of these transactions on Mishka’s 1040 return for 2021 is: Short term gain of $1,365 and Long term loss $3,340.

Pre-net amounts and nature of the gains (losses)

Short term gain:

Short term gain=Selling price -Purchase

Short term gain=$5,185-$3,820

Short term gain=$1,365

Long term loss:

Long term loss=Selling price-Purchase

Long term loss=$9,025-$12,365

Long term loss=-$3,340

Inconclusion the sale of these transactions on Mishka’s 1040 return for 2021 is: Short term gain of $1,365 and Long term loss $3,340.

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