Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Eloise, who is single and has taxable income of $380,000, sells the following capital assets in 2022 with gains and losses as shown: Eloise, who
Eloise, who is single and has taxable income of $380,000, sells the following capital assets in 2022 with gains and losses as shown: Eloise, who is single and has taxable income of $380,000, sells the following capital assets in 2022 with gains and losses as shown: Single If taxable income is: The tax is: Not over $10,275 .10% of taxable income. Over $10,275 but not over $41,775$1,027.50+12% of the excess over $10,275. Over $41,775 but not over $89,075$4,807.50+22% of the excess over $41,775. Over $89,075 but not over $170,050$15,213.50+24% of the excess over $89,075. Over $170,050 but not over $215,950.$34,647.50+32% of the excess over $170,050. Over $215,950 but not over $539,900.$49,335.50+35% of the excess over $215,950. Over $539,900 .$162,718.00+37% of the excess over $539,900 Capital Gains and Dividends Capital gains and losses are assigned to baskets. Five possible tax rates will apply to most capital gains and losses: - Ordinary income tax rates (up to 37% in 2022) for gains on assets held one year or less - 28% rate on collectibles gains and includible Sec. 1202 gains - Preferential tax rates for gains on assets held for more than one year and qualified dividends based on the taxpayer's taxable income and filing status as shown in the following table: * The corresponding amounts if married filing separately are half of the amounts for filing jointly. The preferential rate is zero for taxable income up to $41,675 if married filing separately. a. Determine Eloise's increase in income tax liability as a result of the three sales. All assets are stock held for investment. Ignore the effect of increasing AGI on deductions and phaseout amounts. b. Determine her increase in income tax liability if the holding period for asset B is 8 months. c. Determine her increase in income tax liability if the holding periods are the same as in Part a but asset B is an antique clock. d. Determine her increase in income tax liability if her taxable income is $540,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started