Daniel is considering selling two stocks that have not fared well over recent years. A friend recently informed Daniel that one of his stocks has a special designation, which allows him to treat a loss up to $76,000 on this stock as an ordinary loss rather than the typical capital loss. Daniel figures that he has a loss of $91,200 on each stock. If Daniel’s marginal tax rate is 35 percent and he has $182,400 of other capital gains (taxed at 15 percent), what is the tax savings from the special tax treatment?

Daniel is considering selling two stocks that have not fared well over recent years. A friend recently informed Daniel that one of his stocks has a special designation, which allows him to treat a loss up to $76,000 on this stock as an ordinary loss rather than the typical capital loss. Daniel figures that he has a loss of $91,200 on each stock. If Daniel’s marginal tax rate is 35 percent and he has $182,400 of other capital gains (taxed at 15 percent), what is the tax savings from the special tax treatment?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter7: Losses—deductions And Limitations

Section: Chapter Questions

Problem 57P

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