Lucy files as a head of household in 2021 and has taxable income of $130,000, including the sale of a stock held as an investment for two years at a gain of $22,000. Only one asset was sold during the year and Lucy does not have any capital loss carryovers.

a.	What is the amount of Lucy's tax liability?
b.	What is the amount of Lucy's tax liability if the stock is held for 11 months?

Reference If taxable income is: Not over $14,200 Over $14,200 but not over $54,200 Over $54,200 but not over $86,350 Over $86,350 but not over $164,900 Over $164,900 but not over $209,400 Over $209,400 but not over $523,600 Over $523,600 Head of Household The tax is: 10% of taxable income. . $1,420.00 + 12% of the excess over $14,200. $6,220.00 + 22% of the excess over $54,200. $13,293.00 + 24% of the excess over $86,350. .. $32,145.00 + 32% of the excess over $164,900. $46,385.00 + 35% of the excess over $209,400. . $156,355.00 + 37% of the excess over $523,600. + 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 2021) 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: Preferencial Rate Single Filing Jointly* Head of Household 0% Up to $40,400 Up to $80,800 Up to $54,100 15% > $40,400 but not over $445,850 > $80,800 but not over $501,600 > $54,100 but not over $473,750 20% Over $445,850 Over $501,600 Over $473,750 * 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 540,400 if married filing separately