Question

In 2020, Tom and Amanda Jackson (married filing jointly) have $200,000 of taxable income before considering the following events: (Use the dividends and capital gains tax rates and tax rate schedules.)

1. On May 12, 2020, they sold a painting (art) for $110,000 that was inherited from Grandma on July 23, 2018. The fair market value on the date of Grandma’s death was $90,000 and Grandma’s adjusted basis of the painting was $25,000.
2. They applied a long-term capital loss carryover from 2019 of $10,000.
3. They recognized a $12,000 loss on the 11/1/2020 sale of bonds (acquired on 5/12/2010).
4. They recognized a $4,000 gain on the 12/12/2020 sale of IBM stock (acquired on 2/5/2020).
5. They recognized a $17,000 gain on the 10/17/2020 sale of rental property (the only §1231 transaction), of which $8,000 is reportable as gain subject to the 25 percent maximum rate and the remaining $9,000 is subject to the 0/15/20 percent maximum rates (the property was acquired on 8/2/2014).
6. They recognized a $12,000 loss on the 12/20/2020 sale of bonds (acquired on 1/18/2020).
7. They recognized a $7,000 gain on the 6/27/2020 sale of BH stock (acquired on 7/30/2011).
8. They recognized an $11,000 loss on the 6/13/2020 sale of QuikCo stock (acquired on 3/20/2013).
9. They received $500 of qualified dividends on 7/15/2020.
   
   After completing the required capital gains netting procedures, what will be the Jacksons’ 2020 tax liability? (Do not round intermediate calculations.)

Tax Rates for Net Capital Gains and Qualified Dividends

Rate*	Taxable Income
	Married Filing Jointly	Married Filing Separately	Single	Head of Household	Trusts and Estates
0%	$0 - $80,000	$0 - $40,000	$0 - $40,000	$0 - $53,600	$0 - $2,650
15%	$80,001 - $496,600	$40,001 - $248,300	$40,001 - $441,450	$53,601 - $469,050	$2,651 - $13,150
20%	$496,601+	$248,301+	$441,451+	$469,051+	$13,151+

*This rate applies to the net capital gains and qualified dividends that fall within the range of taxable income specified in the table (net capital gains and qualified dividends are included in taxable income last for this purpose).

Schedule Y-1-Married Filing Jointly or Qualifying Widow(er)

If taxable income is over:	But not over:	The tax is:
$          0	$ 19,750	10% of taxable income
$ 19,750	$ 80,250	$1,975 plus 12% of the excess over $19,750
$ 80,250	$171,050	$9,235 plus 22% of the excess over $80,250
$171,050	$326,600	$29,211 plus 24% of the excess over $171,050
$326,600	$414,700	$66,543 plus 32% of the excess over $326,600
$414,700	$622,050	$94,735 plus 35% of the excess over $414,700
$622,050	—	$167,307.50 plus 37% of the excess over $622,050

Answer 1

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events 200000 Taxable Income before the Qualified Dividend 500 3000 Long term capital Ceain (255) 203500 Taxable income Tax on ordinary Income 29411 + 2407. of (203500 - 36919 171950) Capital Gains : Crug term capital Gaius (251) ) 24% ) 720 Dividend (151 of 500) 75 Total Tax Liability 37794