Question

I can't figure out how to do this question and these are the rates we are using. An explanation would be great so I know what i'm doing.

b. What is Terris Tet What is Terri's tax liability? C. 48. LO.8 During 2019, Inez (a single taxpayer) had the following transactions involving capital assets: Gain on the sale of unimproved land (held as an investment for 3 years) Loss on the sale of a camper (purchased 2 years ago and used for family vacations) Gain on the sale of ADM stock (purchased 9 months ago as an investment) Gain on the sale of a fishing boat and trailer (acquired 18 months ago at an auction and used for recreational purposes) ovil no $3,00 (5,000) 4,000 1,000 a. If Inez has taxable income of $158,000, how much income tax results? b. If Inez has taxable income of $35,000, how much income tax results? 108 During 2019, Chester (a married taxpayer filing a joint return) had the follow-

Answer 1

Relevant Notes on Capital Gains Tax Rates -

Note - (1) - Long-Term Capital Gains -

Long-Term Capital Gains Tax Rate	Single Filers (taxable income)
0%	$0 - $39375
15%	$39376 - $434550
20%	Over $434550

Note - (2) - Short-Term Capital Gains are taxed as though they are ordinary income.

.

(a) -- If Inez has taxable income of $158000, how much income tax results?

Answer -

	Particulars	Explanation	Tax amount ($)
	Long-term capital gain tax:	-	-
	Gain on the sale of unimproved land	$3000 * 15%	450
	Gain on the sale of a fishing boat and trailer	$1000 * 15%	150
I.	Total Long term capital gain tax	$450 + $150	600
	.
	Short-term capital gain tax:	-	-
II.	Gain on the sale of ADM stock	$4000 * 24%	960
	.
Total income tax		I + II	1560

.

(b) -- If Inez has taxable income of $35000, how much income tax results?

Answer -

	Particulars	Explanation	Tax amount ($)
I.	Long term capital gain tax	No Long-term capital gain tax, because taxable income is below the taxable amount.	0
	.
	Short-term capital gain tax:	-	-
II.	Gain on the sale of ADM stock	$4000 * 12%	480
	.
Total income tax		I + II	480