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In 2000, Ms. Ennis, a head of household, contributed $50,000 in exchange for 500 shares of Seta stock. Seta is a qualified small business. This
In 2000, Ms. Ennis, a head of household, contributed $50,000 in exchange for 500 shares of Seta stock. Seta is a qualified small business. This year, Ms. Ennis sold all 500 shares for $117,400. Her only other investment income was an $8,600 long-term capital gain from the sale of land. Her taxable income before consideration of her two capital transactions is $590,000. Assume the taxable year is 2023. Use Individual tax rate schedules and Tax rates for capital gains and qualified dividends.
Required:
- Compute Ms. Enniss income tax and Medicare contribution tax for the year.
- How would the computation change if Ms. Ennis acquired the Seta stock in 2011 instead of 2000?
- How would the computation change if Ms. Ennis acquired the Seta stock in 2020 instead of 2000?
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