Question

In 2019, Jeff and Kim Jenson (married filing a joint return) have $250,000 of taxable income before considering the following transactions: a. On March 2, 2019, they sold a painting (art) for $100,000 that was inherited from Grandma on January 23, 2019. The FMV on the date of Grandma's death was $90,000 and Grandma's adjusted basis in the painting was $25,000; b. A $12,000 loss on 11/1/19 sale of bonds (acquired on 5/12/11); c. A $4,000 gain on 12/12/19 sale of IBM stock (acquired on 2/5/19); d. A $20,000 gain on the 10/17/19 sale of rental property. Of the $20,000 gain, $11,000 is reportable as gain subject to the 25% maximum rate and the remaining $9,000 is subject to the 15% maximum rate (the property was acquired on 8/2/14); e. A $12,000 loss on 12/20/19 sale of bonds (acquired on 1/18/19); f. A $7,000 gain on 8/27/19 sale of BH stock (acquired on 7/30/14); and g. A $11,000 loss on 6/13/19 sale of QuikCo. Stock (acquired on 3/20/16). Complete the required netting procedures and calculate the Jenson's 2019 tax liability. The Jenson's 2019 Tax liability:

Answer 1

Computation of Tax liability Jeff and Kim Jenson
Date	Particulars	Amount
	Taxable income	$250000
Mar 2nd	Proceeds from sale of painting	$90000
Jan 11th	Loss from sale of bonds	($12000)
Dec 12th	Gain on sale of IBM stock	$4000
Oct 17th	Gain on sale of rental property	$20000
Jan 18th	Loss on sale of bonds	($12000)
Aug 27th	Gain on sale of BH stock	$7000
June 13th	Loss on sale of quick stock	($11000)
	Net Taxable Income	$336000
	Tax Liability @32%	$107520
	(Since Jeff and Kim jenson married and filing jointly
	and taxable income fall in the tax bracket $321451 - $408200)