During 2019, your clients, Mr. and Mrs. Garcia, owned the following investment assets:

Investment Assets	Date Acquired	Purchase Price	Brokers Commission Paid at Time of Purchase
300 shares of ALPHABET INC common	11/22/2016	$10,550	$150
200 shares of ALPHABET INC common	4/3/2017	$48,000	$250
3,000 shares of Amazon preferred	12/12/2017	$152,000	$1,350
2,100 shares of Oracle common	8/14/2018	$53,000	$650
451 Shares of Fidelity mutual fund	3/2/2019	$15,100	No load fund*

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

In 2019, due to current market conditions, Mr. and Mrs. Garcia decided to invest in municipal bonds. In order to do this they needed to sell their mutual fund and most of their. The following investment assets were sold in 2019:

Investment Assets	Date Sold	Sale Price	Brokers Commission Paid at Time of Sale
300 shares of ALPHABET INC common	5/6	$13,900	$100
3,000 shares of Amazon preferred	10/5	$224,900	$2,200
2,100 shares of Oracle common	8/15	$65,250	$550
451 Shares of Fidelity mutual fund	12/21	$15,500	No load fund*

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

The Garcias broker issued them a Form 1099-B showing the sales proceeds net of the commissions paid. For example, the ALPHABET INC sales proceeds were reported as $13,800 on the Form 1099-B they received.

In addition to the sales reflected in the table above, the Garcias provided you with the following additional information concerning 2019:

• The Garcias have a $3,500 short-term capital loss carryover and a $5,800 long-term capital loss carryover from prior years.
• The Garcias did not instruct their broker to sell any particular lot of ALPHABET INC stock.
• The Garcias earned $8,000 in municipal bond interest, $4,000 in interest from corporate bonds, and $5,000 in qualified dividends.
• Assume the Garcias have $130,000 of wage income during the year.

1. In Excel, calculate the Garcias taxable income and tax liability for the year with the following assumptions. Label clearly.

1. Ignoring the alternative minimum tax and any phase-out provisions
2. They will file jointly
3. They have no dependents
4. They dont make any special tax elections
5. Their itemized deductions (including investment interest expense) total $26,000

b. In Excel, assume the Garcias short-term capital loss carryover from prior years is $83,500 rather than $3,500 as indicated above. If this is the case, how much short-term and long-term capital loss carryover remains to be carried beyond 2019 to future tax years?

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