Question

Allen Green is a single taxpayer whose income includes $176,000 of salary, $28,600 of interest income from corporate bonds, $10,200 interest income from City of Rockford bonds, $11,200 of dividends, and $6200 of long-term capital gains. Allen’s AGI (and modified AGI) is $222,000. What is Allen's net investment income tax liability this year, rounded to the nearest whole dollar amount?

Answer 1

A capital gain that arises from the sale of a property cor an anet is taxable and a capital gain is a form of investment income, that is a part of the taxable. income of the taxpayer (of an individual. Ginen, AGI (Adjusted Goos. Income) = $222,000 Income from Salary & 176,000 Interest of income from corporate bonds = $28,600 Interest of income from city of Rockford bonds = $10,200 Dividends = $1,200 dong term capital gains & 6200 Calculation of Allen Green's not investment income tax liability's calent Particulars Amount ($) (A) Interest of income from leporatebonds = $28,600 Taterest of income from city of Rockfodborad = $10,200 Dividends a n = $ 16, 200 - Long term capital gains = $6,200 16) Net investment income tax liability = $56,200 (B) Modified Adjusted Grow Income (AGD) – $222.000 Lead Threshold limit =$ 200,000) (B) Income tax liability. $ 22,000 Here, the not investment income tax liability is losser - 3,8% of (A) (os) 3.8% of (B) which ever is but iey 3.8% of 56,200 = $213516 _3.8% 0/22000 = $836 Therefore, the lesser amounts is $836 is the Allen green's net investment income taxe liability for this year.