Question

41.	Excluding additional taxes on Net Investment Income, capital gains from the sale of stock held for six years on March 1, 2018, by a taxpayer in the highest individual tax bracket are taxed at a maximum capital-gains tax rate of:

A. 15 percent.
B. 37 percent.
C. 20 percent.

42.	Capital gains from the sale of stock held for six years on July 1, 2018, by a taxpayer in the lowest individual tax bracket are taxed at a maximum capital-gains tax rate of:

A. 0 percent.
B. 10 percent.
C. 15 percent.

43.	Several items included within Schedule A have changed in 2018 from previous reporting. Which of the following items has NOT changed reporting requirements?

A. The AGI limitation for deducting charitable contributions.
B. Miscellaneous itemized deduction not subject to the 2% floor.
C. Miscellaneous itemized deduction subject to the 2% floor.

44.

During 2018, Scotty charged $5,000 on his credit card for his dependent son’s medical expenses. Payment to the credit-card company had not been made by the time Scotty filed his income tax return in April 2019. However, in February 2018, Scotty paid a physician $2,800 for the medical expenses of his wife, who died in November 2017. Disregarding the adjusted-gross-income percentage threshold, what amount could Scotty claim in his 2018 income tax return for medical expenses?

A. $2,800.
B. $5,000.
C. $7,800.

45.

Barbie and Ken Doll are married and will file a joint 2018 income tax return. They feel their business ‘goodwill’ will improve if they improve their appearance. Therefore, during 2018, they had the following discretionary costs incurred for the purpose of improving their physical appearance and self-esteem: (i) a face lift for Barbie, performed by a licensed surgeon, $5,000; and (ii) a hair transplant for Ken, performed by a licensed surgeon, $5,000. Disregarding the adjusted-gross-income percentage threshold, how much of the doctors’ bills may they claim on their 2018 return as qualifying medical expenses?

A. $0.
B. $5,000.
C. $10,000.

Answer 1

41) Excluding additional taxes on Net Investment Income, capital gains from the sale of stock held for six years on March 1, 2018, by a taxpayer in the highest individual tax bracket are taxed at a maximum capital-gains tax rate of:

Ans: (C) 20 percent.

Explanation:

If long term capital gains fall	Tax Rate on Gain
10 or 15% income tax bracket	0%
25% to 35% bracket	15%
Maximum 39.6% bracket	20%

If taxpayer is in the highest tax bracket maximum capital tax rate gain will be of 20%