Question

Robert A. Kliesh, age 41, is single and has no dependents. Robert's Social Security number is 111-11-1115. His address is 727 Big Horn Avenue, Sheridan, WY 82801. He does not contribute to the Presidential Election Campaign fund through the Form 1040. Robert works as a financial analyst and is well regarded in his field. This year his salary totaled $1,250,000. His professional success has allowed him to purchase investments in real estate and corporate stocks and bonds. He also spends time vol- unteering with various organizations that help people develop financial literacy skills. Examination of Robert's financial records provides the following information for 2019. On January 16, Robert sold 1,000 shares of stock for a loss of $12,000. The stock was acquired 14 months ago for $17,000 and sold for $5,000. On February 15, he sold 400 shares of stock for a gain of $13,100. That stock was acquired in 2011 for $6,000 and sold for $19,100.

Answer 1

The question requires an analysis of Robert A. Kliesh's capital gain and loss from stock sales. A long-term capital loss of $12,000 and a long-term capital gain of $13,100 result in a net gain of $1,100, which is subject to tax.

Step-by-step explanation:

The information provided concerns the financial transactions of Robert A. Kliesh and is related to capital gains and losses incurred through his investment in stocks. To determine the net capital gain or loss for Robert, we will evaluate his two separate stock transactions. One resulted in a capital loss and the other in a capital gain.

Initially, Robert sold 1,000 shares at a loss. Since these shares were held for more than a year, the loss is treated as a long-term capital loss. He purchased the shares for $17,000 and sold them for $5,000, incurring a loss of $12,000.

In a separate transaction, Robert sold 400 shares at a gain. This sale resulted in a long-term capital gain since he held the stock since 2011. He purchased these shares for $6,000 and sold them for $19,100, realizing a gain of $13,100.

To calculate the net capital gain or loss for the year, we simply take the gain of $13,100 and subtract the loss of $12,000, resulting in a net capital gain of $1,100 for Robert. This net capital gain will be reported on his tax return and will be subject to appropriate taxation based on the long-term capital gains tax rates.