Multiple Choice:

I could use a little help. I need some guidance if possible.

Brandon, an individual, began business four years ago and has sold $1231 assets with $5,750 of losses within the last 5 years. Brandon owned each of the assets for several years. In the current year, Brandon sold the following business assets: Original Cost $ 31,500 55,000 120,000 Accumulated Depreciation $ 8,500 Asset Machinery Land Building Gain/Loss $ 10,750 27,500 (20,000) 35,000 Assuming Brandon's marginal ordinary income tax rate is 32 percent, what effect do the gains and losses have on Brandon's tax liability? Use Dividends and Capital Gains Tax Rates for reference. Tax Rates for Net Capital Gains and Qualified Dividends Rate* Taxable Income Single Married Filing Jointly Married Filing Separately Head of Household Trusts and 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 $38,601 - $425,800 $51,701 - $452,400 $2,601 - $12,700 20% $479,000+ $239,500+ $425,801+ $452,401+ $12,701+ *This rate applies to the net capital gains and qualified dividends that fall within the range of taxable income specified in the table (net capital gains and qualified dividends are included in taxable income last for this purpose). $18,250 ordinary income, $5,840 tax liability $18,250 $1231 gain and $2,738 tax liability. o oo $4,000 $1231 gain, $14,250 ordinary income, and $5,160 tax liability $14,250 $1231 gain, $4,000 ordinary income, and $3,418 tax liability. None of the choices are correct