During the current year, Ron and Anne sold the following assets: (Use thedividends and capital gains tax ratesandtax rate schedules.)

Capital Asset Market Value Tax Basis Holding Period

L stock $ 50,000 $ 41,000 > 1 year

M stock 28,000 39,000 > 1 year

N stock 30,000 22,000 < 1 year

O stock 26,000 33,000 < 1 year

Antiques 7,000 4,000 > 1 year

Rental home 300,000* 90,000 > 1 year

*$30,000 of the gain is 25 percent gain (from accumulated depreciation on the property).

Ignore the Net Investment Income Tax.

rev: 12_13_2018_QC_CS-151658

a.Given that Ron and Anne have taxable income of only $20,000 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2018 assuming they file a joint return?(Round all your intermediate computations to the nearest whole dollar amount.)

b.Given that Ron and Anne have taxable income of $400,000 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2018 assuming they file a joint return?(Round all your intermediate computations to the nearest whole dollar amount.)