Question

If Olivia Garcia is single and in the 33% tax bracket, calculate the tax associated with each of the following transactions. (Use the IRS regulations for capital gains in effect in 2014.) EXHIBIT 3.2 Capital Gains Tax Categories as of 2014 Capital gains tax rates are as low as 0 percent for low-income or as high as 28 percent for higher income levels and certain types of assets, so long as the holding period is more than 12 months. Tax Brackets/Assets Sold (2014) Tax on Capital gains Holding period Less than All (10%, 15%, 25%, 28%, 33%, 35%, Same as ordinary income 12 months and 39.6%) - any asset sold Over 12 10% and 15% - assets other than real 0% months estate and collectibles 25%, 33%, 35%, 39.6% 15%, or 20% (later only if in 39.6% tax bracket) Sale of depreciable real estate 25% on gain up to depreciation amount Collectibles 28% all gains from collectibles Treat each of the following cases as independent of the others. a. She sold stock for $1,380 that she purchased for $1,000 6 months earlier. Round the answer to the nearest cent. Tax savings should be preceded by a "-" sign. b. She sold bonds for $3,500 that she purchased for $2,000 3 years earlier. Round the answer to the nearest dollar. Tax savings should be preceded by a "-" sign.

Answer 1

Answor: folaing tanauteay + calculate -the dar associated with Each d, the Sale Gain = $1,380 - 1, 000 on $30 $ 380 X 33/. income = Tax on topital guin is same as income = as. 4 Tor on Copital gain is some as odi Gain on sade dr bonds = $3,500-$ 9,000 = $ 1,500 capitalgain 1500 x 15/. Tox on = $aa5 .:Toot on © Gam on sale = $ 1, 110 - $1, 500 O bɛ f-=

Taz aing=- --f 58.5 -390 XI5/. 'Tax ving f-58.5