FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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 $
60, 000 on this stock as an ordinary
loss rather than the typical capital loss.
Daniel figures that he has a loss of $
72, 000 on each stock. If Daniel's
marginal tax rate is 35 percent and he
has $144,000 of other capital gains (
taxed at 15 percent), what is the tax
savings from the special tax
treatment?
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Transcribed Image Text: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 $ 60, 000 on this stock as an ordinary loss rather than the typical capital loss. Daniel figures that he has a loss of $ 72, 000 on each stock. If Daniel's marginal tax rate is 35 percent and he has $144,000 of other capital gains ( taxed at 15 percent), what is the tax savings from the special tax treatment?
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