Question
Diane Stacy, who has a 33 percent marginal income tax rate and a 3.8 percent Medicare contribution tax rate on investment income, owns 13,800 shares
Diane Stacy, who has a 33 percent marginal income tax rate and a 3.8 percent Medicare contribution tax rate on investment income, owns 13,800 shares in Tobler Mutual Fund. This year, she received an $88,400 dividend from Tobler. Assume the taxable year is 2016. Compute Dianes total federal tax on this income if her Form 1099 from Tobler reported that:
a. The entire dividend was a qualified dividend distribution.
Income tax:
Medicare contribution tax:
Total Federal Tax:
b. $61,000 was an ordinary dividend and $27,400 was a qualified dividend distribution.
Income tax:
Medicare contribution tax:
Total Federal Tax:
c. $45,500 was a qualified dividend distribution and $42,900 was a capital gain distribution.
Income tax:
Medicare contribution tax:
Total Federal Tax:
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