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During 2 0 2 3 , your clients, Mr . and Mrs . Howell, owned the following investment assets: Investment Assets Date Acquired Purchase Price
During your clients, Mr and Mrs Howell, owned the following investment assets:
Investment Assets Date Acquired Purchase Price Broker's Commission Paid at Time of Purchase
shares of IBM common NYSE: IBM $ $
shares of IBM common NYSE: IBM
shares of Apple preferred NASDAQ: AAPL
shares of Cisco common NASDAQ: CSCO
shares of Vanguard mutual fund Noload fund
No commissions are charged when noload 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 and to reinvest in municipal bonds. The following investment assets were sold in :
Investment Assets Date Sold Sale Price Broker's Commission Paid at Time of Sale
shares of IBM common $ $
shares of Apple preferred
shares of Cisco common
shares of Vanguard mutual fund Noload fund
No commissions are charged when noload mutual funds are bought and sold.
The Howells' broker issued them a Form B showing the sales proceeds net of the commissions paid. For example, the IBM sales proceeds were reported as $ on the Form B they received.
In addition to the sales reflected in the table above, the Howells provided you with the following additional information concerning :
The Howells received a Form B from the Vanguard mutual fund reporting a $ longterm capital gain distribution. This distribution was reinvested in additional Vanguard mutual fund shares on
In Mrs Howell loaned $ to a friend who was starting a new multilevel marketing company called LD The friend declared bankruptcy in and Mrs Howell has been notified she will not be receiving any repayment of the loan.
The Howells have a $ shortterm capital loss carryover and a $ longterm capital loss carryover from prior years.
The Howells did not instruct their broker to sell any particular lot of IBM stock.
The Howells earned $ in municipal bond interest, $ in interest from corporate bonds, and $ in qualified dividends.
Assume the Howells have $ of wage income during the year.
a Use Form and page of Schedule D to compute net longterm and shortterm capital gains. Then, compute the Howells' tax liability for the year ignoring the alternative minimum tax and any phaseout provisions assuming they file a joint return, they have no dependents, they don't make any special tax elections, and their itemized deductions total $ Assume that asset bases are reported to the IRS. Use the tax rate schedules, Dividends and Capital Gains Tax Rates.
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