Question

During the current year, Ron and Anne sold the following assets: (Use the dividends and capital gains tax rates and tax rate schedules.)

Capital Asset	Market Value		Tax Basis		Holding Period
L stock	$	50,000	$	41,000	> 1 year
M stock		28,000		39,000	> 1 year
N stock		30,000		22,000	< 1 year
O stock		26,000		33,000	< 1 year
Antiques		7,000		4,000	> 1 year
Rental home		300,000*		90,000	> 1 year

*$30,000 of the gain is 25 percent gain (from accumulated depreciation on the property).

Ignore the Net Investment Income Tax.

b. Given that Ron and Anne have taxable income of $400,000 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2019 assuming they file a joint return? (Round all your intermediate computations to the nearest whole dollar amount.)

Answer 1

Ron & Anne

2019 TY

MFJ

Capital Gain Worksheet -

ST Capital Gain /Loss
	Proceeds	Basis	Gain / Loss
N Stock	30,000	22,000	8,000
O Stock	26,000	33000	-7,000
			1,000
LT Capital Gain / Loss
	Proceeds	Basis	Gain / Loss
L Stock	50,000	41,000	9,000
M stock	28,000	39,000	-11,000
			-2,000
Other Gain / Loss - Antigues @ 28%
Antiques	7,000	4,000	3,000
Rental Home Gain /Loss
Proceeds	300,000
Basis	90,000
	210,000
Acc. Depreciation	30,000
	240,000
Capital Gain / Loss					241,000
Ordinary Income					1,000

b) Given that taxpayers have an ordinary income of $400,000 before the above assets sales - the tax liability for 2019 with MFJ status will be

Total Income	400,000
Less standard Deduction	24,400	2019
Taxable Income	375,600
Tax	82,825