Question

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 $64,050. Meg works part-time at the same university. She earns $33,350 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.) Problem 7-45 Part-b b. What is the Comers’ tax liability for 2019 if they report the following capital gains and losses for the year? Short-term capital gains $ 1,500 Short-term capital losses 0 Long-term capital gains 13,140 Long-term capital losses (10,070 )

Answer 1

SALARY NET SHORT TERM CAPITAL GAIN NET LONG TERM CAPITAL GAIN AGI AMOUNT($) 97400 1500 3070 101970 -24400 77570 -3070 LONG TERM CAPITAL GAIN 74500 STANDARD DEDUCTION TAXABLE INCOME SEPERATELY TAXED INCOME INCOME TAXED AT ORDINARY RATES LESS: COMPUTATION OF TAX LIABILITY TAX LIABILITY ON $74500 = 1940+ 12%(74500-19400) = $ 8552 TAX ON LONG TERM CAPITAL GAIN = 0 REASON: AS TAXABLE INCOME IS BELOW $ 78750 FOR MARRIED , FILING JOINTLY TOTAL TAX = $ 8552 + 0 = $ 8552