6.3 Capital Gains and Losses

Question 1

14 points related to Capital Gains and Losses

Answer 1

1-Capital Losses
2-Gain (Loss) Realized and Recognized
3-Holding Period
4-Taxation
5-Return of Capital
6-Wash Sales
7-Small Business Stock
8-Small Business Stock Exclusion
9-Nonbusiness Bad Debt
10-Business Start-up Costs
11-Short Sales
12-Casualties
13-Market Discount Bonds
14-Bond Premium Treatment

Question 2

How are capital gains grouped in their respective baskets?

Answer 2

LTCG - 15% basket
LTCG of qualified small business stock - 28% basket
STCG - 35% basket

Losses for each long-term tax rate group are used to offset gains within the group.

Question 3

A nonbusiness bad debt is one that arises other than in connection with a trade or business of the taxpayer. When a nonbusiness bad debt becomes worthless, the loss that results is treated as a?

Answer 3

short-term capital loss