Question

Lacey Hansen is single and received the items and amounts of income shown below during 2018,...

Lacey Hansen is single and received the items and amounts of income shown below during 2018, as shown below. Determine the marginal tax rate applicable to each item. Note that if the item is not taxable, the marginal rate is 0.

Salary - $30,000

Dividends - $800

Gift from Mother - $500

Child support from ex husband - $3600

Interest on savings account - $250

Rental Property - $900

Loan from Bank - $2000

Interest on State Government Bonds - $300

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Answer #1
Salary - $30,000 12%
Dividends - $800 12%
Gift from Mother - $500 0%
Child support from ex-husband - $3600 0%
Interest on a savings account - $250 12%
Rental Property - $900 12%
The loan from Bank - $2000 0%
Interest on State Government Bonds - $300 0%

If dividends are qualified dividends then the marginal tax rate applies only to dividends are 0%

Ordinary income
Particulars Amount
Salary $ 30,000
Dividends (assumed ordinary) $      800
Interest on savings account $      250
Rental property $      900
Total ordinary income $ 31,950
Tax Bracket -2018
0 - $9,525 10%
$9,525 - $38,700 12%
0 0
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