Question

In X8, Erin had the following capital gains (losses) from the sale of her investments: $2,000 long term capital gain, $25,000 short term capital gain, ($9,000) long term capital loss, and ($15,000) short term capital loss. what is the amount and nature of erin's capital gains and losses?

A. $3,000 net short-term capital gain.
B. $3,000 net long-term capital loss.
C. $4,000 net short-term capital gain.
D. $4,000 net long-term capital loss.
E. None of the choices are correct.

Answer 1

A. $3,000 net short-term capital gain

Step-by-step explanation:

Calculation to determine the amount and nature of erin's capital gains and losses

Using this formula

Capital gains and losses=[long term capital gain+(long term capital loss)]-

[short term capital gain+(short term capital loss]

Let plug in the formula

Capital gains and losses=[$2,000+($9,000)]-[$25,000+($15,000)]

Capital gains and losses=($7,000)+$10,000

Capital gains and losses=$3,000

Therefore the amount and nature of erin's capital gains and losses is $3,000 net short-term capital gain