Capital Gains Tax. During 2019, Taylor sells two capital assets. The first results in a $9,000 short-term capital gain….

Capital Gains Tax. During 2019, Taylor sells two capital assets. The first results in a $9,000 short-term capital gain….

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Capital Gains Tax. During 2019, Taylor sells two capital assets. The first results
in a $9,000 short-term capital gain. The second results in a $2,600 long-term capital loss. Taylor’s
AGI without taking these gains and losses into consideration is $125,444 (no qualified dividends
Taylor files as a qualifying widow(er) and deducts the standard deduction. Compute Taylor’s 2019
income tax liability.
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AGI before gains and losses
Short-term capital gain
Long-term capital loss
AGI
Less: Standard deduction (2019)
Taxable income
Tax (effective rate of 14.0345%)
(using Tax Rate Schedule Y-1 for MFJ/Qualifying Widow(er))
Plus: Tax on capital gain net of capital loss
Tax from Tax Table (Qualifying Widow(er))
Section 1244 Stock.
$
If Hale were single, how would he treat the loss on his tax return?
$
$
SS
S
$
Hale sells 1,000 shares of his Section 1244 stock (“small business corporation” stock) at a
loss of $200,000. If Hale and his wife file a joint return, how will this loss be treated on the
tax return.
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬ Remember:
Individuals can deduct as ordinary losses up to $50,000 if a single taxpayer
or $100,000 if married filing joint.
Once losses exceed the ordinary loss limit they are considered capital losses.

Expert Answer:

Answer rating: 100% (QA)

Let s calculate Taylor s 2019 income tax liability AGI before gains and losses 125 444 Short term capital gain 9 000 Long term capital loss 2 600 Calc
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