Saleh sold the following stock in 2021. ABC, Incorporated, is a § 1202 qualified small business (QSB). Asset Cost Acquired Sale Price Sale Date ABC, Incorporated, 190 shares $ 141,550 01/10/2020 $ 181,260 04/30/2021 DEF, Incorporated, 140 shares 27,300 11/15/2017 21,000 02/28/2021 GHI, Incorporated, 70 shares 26,740 03/31/2020 23,800 08/30/2021 Required: Complete the chart. After netting, what is the total gain or loss? If Saleh is in the 37% tax rate bracket, at what rate is the net gain or loss taxed?

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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.