Question

in the current year, erin had the following capital gains (losses) from the sale of her investments: $2,500 ltcg, $24,500 stcg, ($9,500) ltcg, and ($15,500) stcg. what is the amount and nature of erin's capital gains and losses?

Answer 1

The amount of Erin's capital gain and loss = $2,000 net short-term capital gain

Short term capital loss :

A short- term loss is a deficiency realized from the trade of particular or investment property that has been held for one time or lower. The amount of the short- term loss is the difference between the base of the capital asset – or the purchase price – and the trade price entered for dealing it

Evaluation :

The computation of the amount of the capital gains and losses is shown below:

= Long term capital gain - long term capital loss

                                      = $2,500 - $9,500

                                           =  -$7,000

= Short term capital gain - short term capital loss

                                      = $24,500 - $15,500

                                             = $9,000

Amount of capital gain and loss = $9,000 - $7,000

                                                            = $2000

After equating the above values the balance would be $2,000 and considered as a short term capital gain

Is there a difference between long and short term capital loss?

To rightly arrive at your net capital gain or loss, capital earnings and losses are classified as long- term or short- term. Generally, if you hold the asset for further than one time before you dispose of it, your capital gain or loss is long-term.However, your capital gain or loss is short- term  If you hold it one time or lower.

Learn more about short term capital loss :

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