Question

7.) Matt and Meg Comer are married. They do not have any children. Matt works as a history professor at a local university and earns a salary of $65,000. Meg works part-time at the same university. She earns $37,000 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). What is the Comers’ tax liability for 2019 if they report the following capital gains and losses for the year?

Short-term capital gains $9,000

Short-term capital losses ($2,000)

Long-term capital gains $15,000

Long-term capital losses ($6,000)

8.) Christopher sold 100 shares of Cisco stock for $4,500 in the current year. He purchased the shares several years ago for $2,200. Assuming his marginal ordinary income tax rate is 24 percent, and he has no other capital gains or losses, how much tax will he pay on this gain?

9.) Rubio recently invested $20,000 (tax basis) in purchasing a limited partnership interest. His at-risk amount is $15,000. In addition, Rubio’s share of the limited partnership loss for the year is $22,000, his share of income from a different limited partnership was $4,000, and he had $40,000 in wage income and $10,000 in long-term capital gains. How much of Rubio’s $22,000 loss from the limited partnership can he deduct in the current year considering all limitations?

10.) Anwar owns a rental home and is involved in maintaining it and approving renters. During the year he has a net loss of $8,000 from renting the home. His other sources of income during the year were a salary of $111,000 and $25,000 of long-term capital gains. How much of Anwar’s $8,000 rental loss can he deduct currently if he has no sources of passive income? (Enter your answer as a positive)

Answer 1

7) In the given problem, Matt annual income is $65,000 and Meg annual income is $37,000

Therefore , the total income of the family jointly is = $102,000.

Matt and Meg have incurred following capital gains and losses

Short term capital gain = $9,000

short term capital loss = $2,000

Net short term gain = short term capital gain - short term capital loss

= $9,000 - 2,000

= $7,000

Similarly,

Net long term gain = $15,000 - $6,000

= $9,000

The 2019 tax schedule for married taxpayers filing jointly is as follows

Marginal toy Marginal tax rate of the amount in excess of ($) 2 3 A B Taxable income range Minimum Maximum ($) ($) 0 19,400 19,401 78,950 78,951 168,400 168,401 321,450 321,451 408,200 408,201 612,350 612,351 or more 10% 12% 22% 24% 32% 35% 37% 19,400 78,950 168,400 321,450 408,200 612,350 10

Particulars Matt annual income Meg annual income Net short term gain Net long term gain Adjusted Gross Income Less: Standard deduction Less: personal deduction Taxable income Amount ($) 65,000 37,000 7000 9000 118,000 -24,400 7 93,600

the ordinary taxable income for both is $84,600 from the table.

This taxable income is in the range of 78,951 to 168,400.

Therefore the nominal tax is $7,146.

Taxes = (7,146 + (84,600 - 19,400) * 12%)

= $14,970.

At 10% & 12% Taxable is ordinary income , so it is preferentiel tax rate will be 0.

Therefore tax liability = $14,970.