During $2023,$ your clients, Mr$.$ and Mrs$.$ Howell, owned the following investment assets: During $2023,$ your clients, Mr$.$ and Mrs$.$ Howell, owned the following investment assets:

$*$No commissions are charged when no$-$load mutual funds are bought and sold.

Because of the downturn in the stock market, Mr$.$ and Mrs$.$ Howell decided to sell most of their stocks and the mutual fund

in $2023$ and to reinvest in municipal bonds. The following investment assets were sold in $2023$:

$*$No commissions are charged when no$-$load mutual funds are bought and sold.

The Howells' broker issued them a Form $1099-$B showing the sales proceeds net of the commissions paid. For example,

the IBM sales proceeds were reported as $$13,900$ on the Form $1099-$B they received.

In addition to the sales reflected in the table above, the Howells provided you with the following additional information

concerning $2023$:

The Howells received a Form $1099-$B from the Vanguard mutual fund reporting a $$900$ long$-$term capital gain

distribution. This distribution was reinvested in $31$ additional Vanguard mutual fund shares on $6/30/2023.$

In $2017,$ Mrs$.$ Howell loaned $$6,300$ to a friend who was starting a new multilevel marketing company called LD$3.$ The

friend declared bankruptcy in $2023,$ and Mrs$.$ Howell has been notified she will not be receiving any repayment of the

loan.

The Howells have a $$2,600$ short$-$term capital loss carryover and a $$5,100$ long$-$term capital loss carryover from prior

years.

The Howells did not instruct their broker to sell any particular lot of IBM stock.

The Howells earned $$3,150$ in municipal bond interest, $$3,150$ in interest from corporate bonds, and $$4,300$ in qualified

dividends.

Assume the Howells have $$137,500$ of wage income during the year. a$-3.$ Compute the Howells' tax liability for the year $($ignoring the alternative minimum tax and any phase$-$out provisions$)$ assuming they

file a joint return, they have no dependents, they don't make any special tax elections, and their itemized deductions total $$30,000.$

$($Use the tax rate schedules, Dividends and Capital Gains Tax Rates.$)$

Howells' tax liability for the year

Investment Assets Date Acquired Purchase Price Broker's Commission Paid at Time of Purchase

$300$ shares of IBM common $($NYSE: IBM$)11/22/2020$ $ $10,380$ $ $100$

$200$ shares of IBM common $($NYSE: IBM$)4/3/202143,280300$

$3,000$ shares of Apple preferred $($NASDAQ: AAPL$)12/12/2021150,0001,300$

$2,100$ shares of Cisco common $($NASDAQ: CSCO$)8/14/202252,800550$

$420$ shares of Vanguard mutual fund $3/2/202315,000$ No$-$load fund$*$

$*$No commissions are charged when no$-$load mutual funds are bought and sold.

Because of the downturn in the stock market, Mr$.$ and Mrs$.$ Howell decided to sell most of their stocks and the mutual fund in $2023$ and to reinvest in municipal bonds. The following investment assets were sold in $2023$:

Investment Assets Date Sold Sale Price Broker's Commission Paid at Time of Sale

$300$ shares of IBM common $5/6$ $ $14,000$ $ $100$

$3,000$ shares of Apple preferred $10/5221,7002,000$

$2,100$ shares of Cisco common $8/1563,280650$

$451$ shares of Vanguard mutual fund $12/2116,000$ No$-$load fund$*$

$*$No commissions are charged when no$-$load mutual funds are bought and sold.

The Howells' broker issued them a Form $1099-$B showing the sales proceeds net of the commissions paid. For example, the IBM sales proceeds were reported as $$13,900$ on the Form $1099-$B they received.

In addition to the sales reflected in the table above, the Howells provided you with the following additional information concerning $2023$:

The Howells received a Form $1099-$B from the Vanguard mutual fund reporting a $$900$ long$-$term capital gain distribution. This distribution was reinvested in $31$ additional Vanguard mutual fund shares on $6/30/2023.$

In $2017,$ Mrs$.$ Howell loaned $$6,300$ to a friend who was starting a new multilevel marketing company called LD$3.$ The friend declared bankruptcy in $2023,$ and Mrs$.$ Howell has been notified she will not be receiving any repayment of the loan.

The Howells have a $$2,600$ short$-$term capital loss carryover and a $$5,100$ long$-$term capital loss carryover from prior years.

The Howells did not instruct their broker to sell any particular lot of IBM stock.

The Howells earned $$3,150$ in municipal bond interest, $$3,150$ in interest from corporate bonds, and $$4,300$ in qualified dividends.

Assume the Howells have $$137,500$ of wage income during the year.