Her net capital gain position is:
Particulars | Amount | Amount |
Long-term capital gains | $ 12,000 | |
Long-term capital loss | $ (4,000) | |
Net long-term capital gain | $ 8,000 | |
Short term capital gain | $ 4,000 | |
Short-term capital loss | $ (8,000) | |
Net short-term capital loss | $ (4,000) | |
Net long-term capital gain | $ 4,000 |
Taxpayer has net position of $4,000 net capital gain. Tax payable on all income is:
(a)
Tax payable on $54,000 taxable income is:
Particulars | Amount | Tax |
Tax payable on $50,000 normal income using tax rate schedule | ||
[$1,385 + ($50,000 - $13,850)× 12%] | $ 5,723 | |
Tax on capital gains: | ||
Income taxable at 0% rate: | ||
Taxable income including capital gains | $ 54,000 | |
Less: 0% tax bracket | $ (52,850) | |
0% capital gains | $ 1,150 | |
Income taxable at 15% rate: | ||
Capital gains | $ 4,000 | |
Less: 0% capital gains | $ (1,150) | |
15% capital gains | $ 2,850 | |
Tax on
capital gains [$2,850 × 15%] |
$ 427.50 | |
Total tax | $ 6,150.50 |
(b)
Tax payable on $74,000 taxable income is:
Capital gains are taxable at flat 15% in the given scenario.
Particulars | Amount | Tax |
Tax payable on $70,000 normal income using tax rate schedule | ||
[$6,065 + ($70,000 - $52,850)× 22%] | $ 9,838 | |
Tax on capital gains: | ||
Tax on
capital gains [$4,000 × 15%] |
$ 600.00 | |
Total tax | $ 10,438.00 |
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