Question

Required information [The following information applies to the questions displayed below.) During the current year, Ron and Anne sold the following assets: (Use the dividends and capital gains tax rates and tax rate schedules.) Capital Asset L stock M stock N stock O stock Antiques Rental home Market Value $ 50,000 28,000 30,000 26,000 7,000 300.000 Tax Basis $41,000 39,000 22,000 33,000 4,000 90.000 Holding Period > 1 year > 1 year <l year < 1 year > 1 year > 1 year $30,000 of the gain is 25 percent gain (from accumulated depreciation on the property- Ignore the Net Investment Income Tax. a. Given that Ron and Anne have taxable income of only $20,000 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2019 assuming they file a joint return? (Round all your intermediate computations to the nearest whole dollar amount.) Gross the limbi $ 51,179

Answer 1

A)

Capital Asset	Market Value	Tax Basis	Taxable Gain
L Stock	$ 50,000	$ 41,000	$ 9,000
M Stock	$ 28,000	$ 39,000	($11,000)
N Stock	$ 30,000	$ 22,000	$8,000
O Stock	$ 26,000	$ 33,000	($ 7,000)
Antique	$ 7,000	$ 4,000	$3,000
Rental Income	$ 300,000	$ 90,000	$210,000
			$212,000
Other Income			$20,000
Tax Liability as per Shedule Y1			$28,765
Excess Income Over ($168,400)			$139,635
Tax in above @ 24%			$ 33,512

B)

Capital	Market Value	Tax Basis	Taxable Gain
L Stock	$ 50, 000	$41,000	$ 9,000
M Stock	$ 28,000	$39,000	($ 11,000)
N Stock	$30,000	$22,000	$ 8,000
O Stock	$26,000	$33,000	$ 7,000
Antiques	$7,000	$4,000	$3,000
Rental Income	$300,000	$90,000	$ 210,000
			$ 212,000
Other Income			$ 400,000
			$ 93257
Tax Liability as per shedule Y1			$93257
Excess Income Over $408200			$314943
Tax in above @35%			$110230