Sharon Has the Following Results of Netting Her Short-Term and Long-Term

question 115

Essay

Sharon has the following results of netting her short-term and long-term capital gains and losses for 2017: $56,000 short-term capital loss, and $82,000 net long-term capital gain ($21,000 0%/15%/20% long-term capital gain, and $61,000 25% long-term capital gain).
(a) What is her net capital gain or loss for 2017?
(b) If there is a net capital loss, how much of the loss and what type of loss carries over to 2018?
(c) If there is a net long-term capital gain, what is it made up of?

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Definitions:

Portfolio

A portfolio containing different types of financial assets, like stocks, bonds, commodities, cash, and similar investments, including mutual funds and ETFs.

Stock A

A type of financial instrument representing ownership in a corporation and a claim on part of the corporation's assets and earnings.

Stock B

Refers to a classification of stocks that are considered as a less volatile investment than Stock A; often paying dividends.

Security Market Line

A line graph that represents the relationship between risk (beta) and the expected return of the market and various securities.