Question

In X8, Erin had the following capital gains (losses) from the sale of her investments: $2,600 LTCG, $24,400 STCG, ($9,600) LTCL, and ($15,600) STCL. What is the amount and nature of Erin's capital gains and losses?

Answer 1

Erin's capital gains are the sum of her long-term capital gains (LTCG) and short-term capital gains (STCG), which is $2,600 + $24,400 = $27,000.

Erin's capital losses are the sum of her long-term capital losses (LTCL) and short-term capital losses (STCL), which is ($9,600) + ($15,600) = ($25,200).

Since Erin's capital gains exceed her capital losses, she has a net capital gain of $27,000 - $25,200 = $1,800.

The nature of Erin's capital gains and losses are as follows:

• LTCG: long-term capital gain, meaning the asset was held for more than one year before it was sold.
• STCG: short-term capital gain, meaning the asset was held for one year or less before it was sold.
• LTCL: long-term capital loss, meaning the asset was held for more than one year before it was sold.
• STCL: short-term capital loss, meaning the asset was held for one year or less before it was sold.