Question

Required information [The following information applies to the questions displayed below.] Matt and Meg Comer are married and file a joint tax return. They do not have any children. Matt works as a history professor at a local university and earns a salary of $64,000. Meg works part-time at the same university. She earns $33,000 a year. The couple does not itemize deductions. Other than salary, the Comers' only other source of income is from the disposition of various capital assets (mostly stocks). (Use the tax rate schedules, Dividends and Capital Gains Tax Rates.) (Round your final answers to the nearest whole dollar amount.) a. What is the Comers' tax liability for 2019 if they report the following capital gains and losses for the year? Short-term capital gains Short-term capital losses Long-term capital gains Long-term capital losses $ 9,000 (2,000) 15,000 (6,000) Total tax liability

Answer 1

Long term capital gains = $ 15,000

Less: long term capital loss = $ 6,000

Net long term capital income = $ 9,000

No long term capital gain tax to be paid on it. Capital gain tax is 0% for net capital income ranging from $ 0 to $ 78,750 for joint tax return.

Short term capital gain = $ 9,000

Less: short term capital loss = $ 2,000

Net short term capital income = $ 7,000

Short term capital income is taxable as ordinary income.

Total ordinary income of the couple = $ 64,000 + $ 33,000 + $ 7,000 = $ 104,000

Calculation for taxable liability

Range of income	tax rate	taxable liability
$ 0 to $ 19,400	10%	$ 1,940
$ 19,401 to 78,950	12%	$ 7,146
$ 78,951 to $ 104,000	22%	$ 5,511
Total tax liability =		$ 14,597