Question

Barry experienced the following sales of stock and other property during the 2019 tax year. Additionally, Barry has a long-term capital loss carryover of $5,000. Excluding the sales noted below, Barry (single) also has ordinary taxable income of $155,000. What is Barry’s total tax liability for 2019?

Asset	Acquisition Date	Disposition Date	Basis	Proceeds
Stock 1	1/1/2010	2/15/2019	$6,800	$12,500
Stock 2	2/2/2012	2/28/2019	$15,900	$2,000
Stock 3	10/30/2018	3/15/2019	$15,000	$22,500
Stock 4	11/30/2018	12/15/2019	$9,000	$7,500
Collectible Antique Vase	5/5/2015	8/30/2019	$25,000	$35,000
Land held for Investment	9/25/2009	9/14/2019	$120,000	$160,000

Answer 1

Ordinary income	$        155,000
Add: short term capital gain	$            7,500
Income taxable at regular rates	$        162,500
Income tax liability	$          27,467
[ 9086 + ( 162500 - 78950 ) × 0.22 ]
Tax on 15% gains [$30,300 × 15%]	$            4,545
Tax on 28% gains [$10,000 × 28%]	$            2,800
Total tax	$          34,812

Below is the break-up of capital gains:

	Short term	15% gains	28% gains
Stock 1		$            5,700
Stock 2		$         (13,900)
Stock 3	$            7,500
Stock 4		$           (1,500)
Antique			$          10,000
Land		$          40,000
Capital gains under group	$            7,500	$          30,300	$          10,000

Total tax is $34,812.

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