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You bought 1,000 shares of Tund Corp. stock for $75.00 per share and sold it for $77.25 per share...

Question:

You bought 1,000 shares of Tund Corp. stock for $75.00 per share and sold it for $77.25 per share within the same year. How will your gain or loss be treated when you file your taxes?


A. As a capital gain taxed at the current ordinary income tax rate

B. As a capital gain taxed at the long-term tax rate

Capital Gain:

Capital gain is caused by the appreciation in value of an asset or a security. Capital gain will be confirmed for tax purpose whenever investors sell holding assets or securities. This gain is a taxable income to investors.

Answer and Explanation:

The answer is A. As a capital gain taxed at the current ordinary income tax rate

Since shares were purchased and sold within a year, it is not qualified for being recognized as long-term capital gain. With that being said, it will be imposed a tax rate as the current ordinary income.


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Income Tax: Tax Liability & Deductions

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Chapter 3 / Lesson 5
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