Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In 2000, Ms. Ennis, a head of household, contributed $64,000 in exchange for 640 shares of Seta stock. Seta is a qualified small business. This

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
In 2000, Ms. Ennis, a head of household, contributed $64,000 in exchange for 640 shares of Seta stock. Seta is a qualified small business. This year, Ms. Ennis sold all 640 shares for $126,000. Her only other investment income was an $7,700 long-term capital gain from the sale of land. Her taxable income before consideration of her two capital transactions is $587,000. Assume the taxable year is 2018. Use Individual tax rate schedules and Tax rates for capital gains and qualified dividends a. Compute Ms. Ennis's income tax, Medicare contribution tax, and total tax for the year. b. How would the computation change if Ms. Ennis acquired the Seta stock in 2011 instead of 2000? c. How would the computation change if Ms. Ennis acquired the Seta stock in 2015 instead of 2000? Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute Ms. Ennis's income tax, Medicare contribution tax, and total tax for the year. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) Taxable income ncome tax Medicare contribution tax Total tax S 625,700 Complete this question by entering your answers in the tabs below. Required A Required BRequired C How would the computation change if Ms. Ennis acquired the Seta stock in 2011 instead of 2000? (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) Taxable income Income tax Medicare contribution tax Total tax Complete this question by entering your answers in the tabs below. Required A Required Required C How would the computation change if Ms. Ennis acquired the Seta stock in 2015 instead of 2000? (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) Taxable income Income tax Medicare contribution tax Total tax INDIVIDUAL TAX RATES Married Filing Jointly and Survlving Spouse If taxable Income is: Not over $19,050 Over $19,050 but not over $77.400 Over $77,400 but not over $165,000 oer $ 1 65,000 but not over $31 5,000 Over $315,000 but not over $400,000 Over $400,000 but not over $600.000 Over $600,000 The tax is: 10% of taxable income $1.90500+ 12% of excess over $19,050 $8.907 00 + 22% of excess over $77,400 $28, 17900 + 24%of excess over $165000 $64,179.00 + 32% of excess over $315,000 591.379 O0+ 35% of excess over S400000 $161.379.00 + 37% of excess over$600.000 Married Fling Separately If taxable Income is: Not over $9,525 Over $9.525 but not over $38,700 Over $38,700 but not over $82,500 Over $82,500 but not over $157,500 Over $157,500 but not over $200,000 Over $200,000 but not over $300.000 Over $300,000 The tax is: 10% of taxable income S952 50 + 12% of excess over $9525 4,453 50 + 22% of excess over S38.700 51 4,089.50 + 24% of excess over S82500 $32.08950 32% of excess over $157,500 $45,689 50 35% of excess over $200,000 s80.689 50 + 37% of excess over $300,000 Heads of Household taxable Income is: Not over $13,600 Over $13,600 but not over $51,800 Over $51,800 but not over $82,500 Over $82,500 but not over $157.500 The tax Is 10% of taxable income $136000+12% of excess over $13,600 $5944.00 + 22% of excess over SS 1.800 $1 2,698.00 + 24% of excess over S82.500 $30,698.00 + 32% of excess over $ 157,500 $44,298 00 + 35% of excess over $200,000 $1 49,298 00 + 37% of excess over $500,000 Over $157,500 but not over $200,000 Over $200,000 but not over $500.000 Over $500,000 Single If taxable Income Is: Not over $9,525 Over $9.525 but not over $38,700 Over $38,700 but not over $82,500 Over $82,500 but not over $157,500 Over $157,500 but not over $200,000 Over $200,000 but not over $500,000 Over $500,000 The tax is 10% of taxable income $952.50 + 1 2% of excess over $9,525 $4,453.50 + 22% of excess over $38,700 $14,089.50 + 24% of excess over S82500 $32,089.50 + 32% of excess over $ 1 57,500 $45,689.50 + 35% of excess over $200,000 $150.68950 +37% of excess oer S500000 ESTATE AND TRUST TAX RATES If taxable Income is: Not over $2,550 Over $2,550 not over $9,150 Over $9,150 not over $12,500 Over $12,500 The tax Is: 10% of taxable income $255 + 24% of the excess over $2.550 $1,839 + 35% ofthe excess over S9.150 $3.01 1.50 + 37% of the excess over $ 1 2.500 Tax rates for capital gains and qualified dividends. Rate Taxable Income Head of Household Married Filing Married Filing Single Trusts and Jointly Separately Estates 0%* $0 $77,200 0 $38,600 $0 $38,600 $0 $51,700 $0 $2,600 $77,201 $479,000 $38,601 $239,500 15%". | $38,601 $425,800$51,701 2,601 $12,700 $452,400 20% $479,000+ 239,500+ 425,801+ $452,401+ $12,701+ The highest income amount in this range for each filing status is referred to as the maximum zero rate amount. The highest income amount in this range for each filing status is referred to as the maximum 15-percent amount

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Principles And Techniques

Authors: Sanjib Kumar Basu, Andrei Alexandrescu

1st Edition

8177581783, 9788177581782

More Books

Students also viewed these Accounting questions