George bought the following amounts of Stock A over the years: Note: Loss amounts should be indicated with a minus sign. Date Purchased 11/21/1996 3/18/2002 5/22/2011 $ 25,680 9,630 29,520 On October 12, 2022, he sold 1,305 of his shares of Stock A for $38 per share. Stock A Stock A Stock A Number of Shares 1,070 535 820 Gain or loss to be recognized a. How much gain/loss will George have to recognize if he uses the FIFO method of accounting for the shares sold? Adjusted Basis $ 49,590

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Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.