Reference no: EM132041006

Teddy, a single taxpayer with no dependents, with an AGI of $500,000 has the following this year:

$18,000 in long-term capital gains

$4,000 in long-term capital losses

$6,000 in short-term capital gains

$8,000 in short-term capital losses

What are the tax implications?

A) Because of Ted's marginal tax rate, his net capital gains may be taxed as high as 20%.

B) Because of Ted's marginal tax rate, his net capital gains will be taxed at 15%.

C) Ted's tax rate on the net capital gains may be as high as 23.8%.

D) Because of Ted's marginal tax rate, he will not be taxed on net capital gains.