Answer:
$0
Explanation:
The computation of the current year tax saving from the capital loss is as follows:
= (Long term capital gain - short term capital loss) × difference in the tax rate
= ($25,700 - $33,000) × 0.15
= -$7,300 × 0.15
As there is no current year saving since the net short term capital loss is more than the long term capital gain
So the saving would be zero
The current year tax savings of Mr. Imhoff from the capital loss is Nil.
Tax Savings refers to the reduction in the amount of tax payable to the relevant Tax Authority by an individual or an entity. It is an advantage to the tax payer because of the reduction benefit in the tax payment.
The current year tax saving from the capital loss can be seen below:
= (Long term capital gain - short term capital loss) × difference in the tax rate
= ($25,700 - $33,000) × 0.15
= -$7,300 × 0.15
= -1,095
Hence, the current year tax savings of Mr. Imhoff is Nil because there is no current year saving; also the net short term capital loss is more than the long term capital gain.
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