Question
The L:inton family tells you the following regarding their financial situation for 2015: Their gross salary...
The L:inton family tells you the following regarding their financial situation for 2015: Their gross salary is $82,000. They also earned $2,000 in interest from a savings account. They paid real estate taxes of $5,000 and interest on their mortgage of $5,000. They earned $1,500 in interest from a General Motors bond. They made $6,000 on the sale of 5 acres that they had owned for 2 years. They sold AES stock they owned for 10 months for a gain of $2,000. The couple has two children. Exemptions are $3,800/person.
a. WHAT IS THEIR TAXABLE INCOME? SHOW YOUR WORK STEP BY STEP.
b.Use the table below to determine their tax liability: SHOW YOUR WORK.
| Taxable Income | Tax Rate | |
| Up to $25,000 | 10% | |
| $25,000 -$40,000 | 15% | |
| $40,000 - $55,000 | 20% | |
| $55,000-$70,000 | 25% | |
| over $70,000 | 35% | |
c. What is the family's marginal tax rate?
d. What is the family's average rate? Show your calculation.
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