Mr. and Mrs. Kilo, married filing jointly, purchased their first home in 2003 for $240,000. They sold this home in 2007 for $210,000. They purchased their second home in 2008 for $435,000 and sold it this year for $1,150,000. Assume the taxable year is 2021.

Required:

Compute the income tax and Medicare contribution tax on the Kilos' gain on the sale of their home this year if their preferential rate on long-term capital gain is 20 percent.