1. In 2020, Anderson, a Single person with taxable income of $38,000, has the following stock transactions: Stock Date Basis Date Sold Proceed Amount Bought realized Stock A 12/22/2005 5,000 1/12/2020 15,000 $10,000 Stock B 11/21/2011 10,000 1/13/2020 2,000 -$8,000 Stock c 4/4/2020 2,000 6/4/2020 8,000 56,000 StockD 4/5/2020 StockE 5/1/2019 7,000 6/5/2020 10,000 3/21/2020 6,000 -$1,000 12,000 $2,000 mmmmm mmmmm a) Fill in the blank cells in the table above b) Calculate Anderson net shortterm capital gain/loss (Show calculation for partial credit) c} Calculate Anderson net Long-term capital gain/loss (Show calculation for partial credit) d) What is Anderson overall net capital gain/loss? (Show calculation and specify the total capital gain/loss amount and its type, either LT or ST?) e} How much tax does Anderson owe solely due to his stock trading activity? (Hint: If your result in (CI) is Long-term capital gain => Anderson is qualified for a preferential longterm capital gain rate. Check that rate in under the \"Tax info 2020" sheet in the \"Tax calculation worksheet\". Once you get the rate, multiply that rate with the amount in part (d) above to get the answer.) Work: a) In table above. b) Net short-term capital gain/loss: $6,000-$1,000+$2,000= $7,000 (shortterm capital gain, in this instance) c) Net long-term capital gain/loss: $10,00058,000= $2,000 {long-term capital gain, in this instance) cl) Overall, net capital gain/loss: No need for further netting. The net ST is $7,000 and the net LT is $2,000. What if Step 2 & Step I end up both gains ? How do we calculate tax from then? -Check Qualified Dividends & Capital Gain tax worksheet Basic idea: Step 1 : Figure out the Taxable IC w / o the LTC G portion ( Remember that after the netting process = > Both LTCG and STCG will come in to 7 Gross IC -/ taxable IC ( all of the items w/ in is considered to be taxed at ordinary Rate ) Ly = the taxable IC current ( on form 1040) - LTCG from step2 of Netting Process] Step 2 : Calculate Tax with the number in prior step Step 3: Calculate LTCG tax amountGross Income (-) Adjustments (Above the Line deductions) Adjusted Gross Income (AGI) (-) From AGI deduction: Greater of (a) Standard deduction OR (b) Itemized deduction mm 38,000 38,000 Deduction for Qual. Business Income (x) Taxable Income Tax rate (-) Income tax liability (-) Credit Prepayment 33,000 Tax due or (Tax refund) 2020 Fed Income Tax Bracket (Source: Nerd Wallet) Tax rate Single Married, ling jointly Married, ling separately 10% $0 to $9,875 $0 to $19,750 $0 to $9,875 $19,751 to $30,250 $9,375 to $40,125 22% $40,126 to $85,525 $80,251 to $171,050 $40,126 to $85,525 24% $85,526 to $163,300 $171,051 to $326,600 $85,526 to $163,300 32% $163,301 to $207,350 $326,601 to $414,700 $163,301 to $207,350 35% $207,351 to $518,400 $414,701 to $622,050 $207,351 to $311,025 37% $518,401 or more $622,051 or more $311,026 or more 2020 Standard Deduction 30000 Filing Status Deduction Amount 50000 Single $12,400 80000 Married Filing Jointly $24,800 Head of Household $18,650 2020 Child Tax Credit $2000/child 2020 Tax Rates on Long Term Capital Gains For Married Individuals Filing , For Heads of Households Jomt Returns For Unmarried Individuals Tax Rate Taxable Income Over 0% $0 $0 $0 15% $40,000 $80,000 $53,600 20% $441,450 $496,600 $469,050 Additional Net Investment Income Tax 3.80% MAGI above $200,000 MAGI above $250,000 MAGI above $200,000 Head of household $0 to $14,100 $14,101 to $53,700 $53,701 to $85,500 $85,501 to $163,300 $163,301 to $207,350 $207,351 to $518,400 $518,401 or more 20000 * |:l