Required information Problem 7-48 (LO 7-2) (Algo) (The following information applies to the questions displayed below.) During the current year, Ron and Anne sold the following assets: (Use the dividends and capital gains tax rates and tax rate schedules.) Capital Asset L stock M stock N stock O stock Antiques Rental home Market Value $ 51,000 29,000 31,000 27,000 8,000 301,000* Tax Basis $ 41,500 39,500 22,500 33,500 4,500 90,500 Holding Period > 1 year > 1 year 1 year > 1 year *$30,000 of the gain is 25 percent gain (from accumulated depreciation on the property). Ignore the Net Investment Income Tax. Problem 7-48 Part-a (Algo) a. Given that Ron and Anne have taxable income of only $21,000 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2021 assuming they file a joint return? Gross tax liability ! Required information Problem 7-48 (LO 7-2) (Algo) [The following information applies to the questions displayed below.] During the current year, Ron and Anne sold the following assets: (Use the dividends and capital gains tax rates and tax rate schedules.) Capital Asset L stock M stock N stock O stock Antiques Rental home Market Value $ 51,000 29,000 31,000 27,000 8,000 301,000* Tax Basis $ 41,500 39,500 22,500 33,500 4,500 90,500 Holding Period > 1 year > 1 year 1 year > 1 year *$30,000 of the gain is 25 percent gain (from accumulated depreciation on the property). Ignore the Net Investment Income Tax. Problem 7-48 Part-b (Algo) b. Given that Ron and Anne have taxable income of $401,000 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2021 assuming they file a joint return? Gross tax liability Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) If taxable income is over: But not over: The tax is: $ 0 $ 19,900 10% of taxable income $ 19,900 $ 81,050 $1,990 plus 12% of the excess over $19,900 $ 81,050 $ 172,750 $9,328 plus 22% of the excess over $81,050 $ 172,750 $ 329,850 $29,502 plus 24% of the excess over $172,750 $ 329,850 $ 418,850 $67,206 plus 32% of the excess over $329,850 $ 418,850 $ 628,300 $95,686 plus 35% of the excess over $418,850 $ 628,300 $168,993.50 plus 37% of the excess over $628,300 Tax Rates for Net Capital Gains and Qualified Dividends Taxable income Rate* Head of Household Trusts and Estates 0% Married Filing Jointly $0 - $80,800 $80,801 - $501,600 $501,601+ Married Filing Separately $0 - $40,400 $40,401 - $250,800 $250,801+ Single $0 - $40,400 $40,401 - $445,850 $445,851+ 15% $0 - $54,100 $54,101 - $473,750 $473,751+ $0 - $2,700 $2,701 - $13,250 $13,251 + 20% Required information Problem 7-48 (LO 7-2) (Algo) (The following information applies to the questions displayed below.) During the current year, Ron and Anne sold the following assets: (Use the dividends and capital gains tax rates and tax rate schedules.) Capital Asset L stock M stock N stock O stock Antiques Rental home Market Value $ 51,000 29,000 31,000 27,000 8,000 301,000* Tax Basis $ 41,500 39,500 22,500 33,500 4,500 90,500 Holding Period > 1 year > 1 year 1 year > 1 year *$30,000 of the gain is 25 percent gain (from accumulated depreciation on the property). Ignore the Net Investment Income Tax. Problem 7-48 Part-a (Algo) a. Given that Ron and Anne have taxable income of only $21,000 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2021 assuming they file a joint return? Gross tax liability ! Required information Problem 7-48 (LO 7-2) (Algo) [The following information applies to the questions displayed below.] During the current year, Ron and Anne sold the following assets: (Use the dividends and capital gains tax rates and tax rate schedules.) Capital Asset L stock M stock N stock O stock Antiques Rental home Market Value $ 51,000 29,000 31,000 27,000 8,000 301,000* Tax Basis $ 41,500 39,500 22,500 33,500 4,500 90,500 Holding Period > 1 year > 1 year 1 year > 1 year *$30,000 of the gain is 25 percent gain (from accumulated depreciation on the property). Ignore the Net Investment Income Tax. Problem 7-48 Part-b (Algo) b. Given that Ron and Anne have taxable income of $401,000 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2021 assuming they file a joint return? Gross tax liability Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) If taxable income is over: But not over: The tax is: $ 0 $ 19,900 10% of taxable income $ 19,900 $ 81,050 $1,990 plus 12% of the excess over $19,900 $ 81,050 $ 172,750 $9,328 plus 22% of the excess over $81,050 $ 172,750 $ 329,850 $29,502 plus 24% of the excess over $172,750 $ 329,850 $ 418,850 $67,206 plus 32% of the excess over $329,850 $ 418,850 $ 628,300 $95,686 plus 35% of the excess over $418,850 $ 628,300 $168,993.50 plus 37% of the excess over $628,300 Tax Rates for Net Capital Gains and Qualified Dividends Taxable income Rate* Head of Household Trusts and Estates 0% Married Filing Jointly $0 - $80,800 $80,801 - $501,600 $501,601+ Married Filing Separately $0 - $40,400 $40,401 - $250,800 $250,801+ Single $0 - $40,400 $40,401 - $445,850 $445,851+ 15% $0 - $54,100 $54,101 - $473,750 $473,751+ $0 - $2,700 $2,701 - $13,250 $13,251 + 20%