Question

In 2018, Tom and Amanda Jackson (married filing jointly) have $288,000 of taxable income before considering the following events (Use the dividends and capital gains tax rates and tax rate schedules) a. On May 12, 2018, they sold a painting (art) for $121,000 that was inherited from Grandma on July 23, 2016. The fair market value on the date of Grandma's death was $95,500 and Grandma's adjusted basis of the painting was $27,200 b. They applied a long-term capital loss carryover from 2017 of $11,100 c. They recognized a $12,550 loss on the 11/1/2018 sale of bonds (acquired on 5/12/2008) d. They recognized a $4,660 gain on the 12/12/2018 sale of IBM stock (acquired on 2/5/2018) e. They recognized a $19,640 gain on the 10/17/2018 sale of rental property the only § 1231 transaction) of which $9,760 is reportable as gain subject to the 25 percent maximum rate and the remaining $9,880 is subject to the 0/15/20 percent maximum rates (the property was acquired on 8/2/2012) f. They recognized a $13,100 loss on the 12/20/2018 sale of bonds (acquired on 1/18/2018) g They recognized a $7,550 gain on the 6/27/2018 sale of BH stock (acquired on 7/30/2009) h. They recognized an $12.100 loss on the 6/13/2018 sale of QuikCo stock (acquired on 3/20/2011) . They received $940 of qualified dividends on 7/15/2018 After completing the required capital gains netting procedures, what will be the Jacksons' 2018 tax liablity? (Do not round intermediate calculations.) Total tax iabilit

Answer 1

ST	LT
	28%	25%	0/15/20%
(d) 4660	(a) 25500	(e) 9760	(c) (12550)
(f) (13100)	(b) (11100)		(e) 9880
			(g) 7550
			(h) (12100)
(8440)	14400	9760	(7220)
	(7220)		7220
(8440)	7180	9760	0
844	(7180)	(1260)
0	0	8500	0

121000-95500 =25500

Taxable income

Taxable Income before the events	288000
Qualified Dividend	940
LTCG 25%	8500
Taxable income	297440

2018 tax liability

Tax on ordinary income:276000	57699 (28179+(24%*(288000-165000)))
Capital gains:
LTCG 25%: (8500*24%)	2040
Dividends:15% * 940	141
Total tax liability	59880