Whitney Corporation acquires Jessamine Corporation. Prior to the merger, Jessamine accumulated a $12,000,000 NOL. After the reorganization, Whitney generates $30,000,000 of taxable income. Whitney is subject to a marginal state and Federal tax rate of 25%; and the § 382 limitation does not apply. How much does Whitney Corporation save in Federal income taxes by being able to utilize Jessamine's NOL carryover? Assume none of the CARES Act NOL provisions apply. Whitney Corporation saves $fill in the blank 1 in state and Federal income taxes by being able to utilize Jessamine's NOL carryover.

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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.