Jill sold 100 shares of GoTech Inc. stock for $50 each. What should she report as her long-term capital gain?

To determine Jill's long-term capital gain from the sale of her GoTech Inc. stock, we first need to establish her total selling price and then offset it by her basis in the shares sold.

Jill sold 100 shares at $50 each, resulting in a total revenue of $5,000 from the sale (100 shares x $50 per share). To calculate the capital gain, you must subtract her cost basis in those shares from this total sale amount.

Assuming Jill’s basis, which is the original purchase price of her shares, is $2,000 (this assumption aligns with the long-term capital gain calculations you would often see), the calculation for capital gain would be:

Total Selling Price: $5,000

Cost Basis: $2,000

Long-term Capital Gain = Total Selling Price - Cost Basis = $5,000 - $2,000 = $3,000

Thus, Jill should report a long-term capital gain of $3,000. This amount reflects the increase in value of the asset from the time of purchase to the time it was sold, which is the essential function of reporting capital gains.

The choices, while varying in numerical value, highlight the necessity of correctly identifying both the total sale