Question

Mindy is single and 33 years old. Mindy has wages of $48,000 and sold the following assets during the year:

Walmart Stock for $5000 — was purchased less than a year ago $3000

GE Stock for $8,000 — was purchased less than a year ago $6000

Personal jewelry for $10,000 — was purchased in 2010 for $5,000

Personal Auto for $5000 — was purchased in 2005 for $18,000

Calculate Mindy’s tax liability for 2018 assuming that she has $10,000 itemized deductions

Answer 1

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Solution: As per IRS, Long term capital gain on "Gold" Jewelry is taxed at 28% (is considered collectible). But in this case, it is not mentioned, is it a "Gold" or which Jewelry. Therefore, both answers have been shown: Answer is highlighted in yellow: Jewelry: As collectible As normal Particulars Wages Net Capital gain: Short-term capital gain - Walmart Stock (5000-3000) Short-term capital gain GE Stock Long term capital gain - Personal jewelry (10000-5000) Loss on personal auto - Gross Income and AGI Less: Greater of itemized or standard deduction Taxable Income Taxable Income at regular tax rate Tax liability at regular rate Tax on Capital gain on jewelry Mindy's tax liability for 2018 Answer can be rounded per question.e.g. (2 decimal Amount OR: 48000 2000 (8000-6000) 2000 5000 Not deductible 0 9000 57000 12000 45000 (45000-5000) (4453.50)+(40000-38700) *22% (5000 28%) or (5000*15%) 40000 4,739.50 $ 4,739.50 $ 1,400.00 $ 750.00 6,139.50 $ 5,489.50 6,140 $ Answer: 5,490 rounded $ or nearest dollar)