Tax Computation

1. Tax based on tax rate schedule Y-1 ( use Taxable income NCG)

__________

What is the tax bracket (marginal rate) for them on Y-1? ____%

2. Tax on Capital Gains:

1. 28% x __________ (if any) = Tax on collectibles

2. For Unrecaptured Section 1250 gain, the applicable tax rate is the lesser of 25% or the marginal rate in step G(1) above.

Tax on Unrecaptured Section 1250 Gain ___________

3. Gains subject to the 15% tax rate ___________

3) Total Self-Employment Tax from Part V _______

Add G(1), G(2) and G(3), this is their total tax ____________

Dean and Ellen Price are married and have a manufacturing business. They bought a piece of business equipment (7-year personal property) on 4/1/2018 for $50,000. Use half-year convention to calculate the MACRS depreciation deduction on the equipment for 2018 and 2019 They also have a pick-up truck used for business (5-year recovery period) acquired on 8/23/2018 for $25,000. On 11/15/2019, he sold the pick-up truck for $24,000. Use the half-year convention to calculate the MACRS depreciation on the truck for 2018 and 2019. On 10/26/2019 Dean sold his old storage building used for his business for $220,000. They purchased the building in 2001 for $100,000. Total depreciation (accumulated depreciation) taken on the building is $20,000. His 2019 Business income and expenditures (Schedule-C): Sales $ 657,500 Cost of goods sold $ 315,000 Other business expenses (incl. deprecation taken on the storage building) $ 140,000 In 2019 Dean also sold various assets. The information about the selling price and depreciation of the property is listed below. Placed in Accumulated Service / 2019 Depr. Tax Basis= Initial Initial Cost Sold on Depreciation. (Derr Purchased Amount Cost - Depr. Allowed) Allowed on Office tables 4/4/2018 $3,000 $375 10/16/2019 For $2,900 11/8/2019 For $4,000 $825 Office chairs 3/1/2015 $8,000 $1,000 $2,200 Marketable securities 12/1/2019 2/1/2019 For $20,000 $12,000 $0 SO 11/29/2019 Land held for investment 7/1/2018 For $48,000 $45,000 $ $0 $0 In 2019 Dean sold his wine collection for $9,000, which is bought two years ago for $8,000. They also has a short-term capital loss carryover of $10,000 from 2009. Dean and Ellen Price are married and have a manufacturing business. They bought a piece of business equipment (7-year personal property) on 4/1/2018 for $50,000. Use half-year convention to calculate the MACRS depreciation deduction on the equipment for 2018 and 2019 They also have a pick-up truck used for business (5-year recovery period) acquired on 8/23/2018 for $25,000. On 11/15/2019, he sold the pick-up truck for $24,000. Use the half-year convention to calculate the MACRS depreciation on the truck for 2018 and 2019. On 10/26/2019 Dean sold his old storage building used for his business for $220,000. They purchased the building in 2001 for $100,000. Total depreciation (accumulated depreciation) taken on the building is $20,000. His 2019 Business income and expenditures (Schedule-C): Sales $ 657,500 Cost of goods sold $ 315,000 Other business expenses (incl. deprecation taken on the storage building) $ 140,000 In 2019 Dean also sold various assets. The information about the selling price and depreciation of the property is listed below. Placed in Accumulated Service / 2019 Depr. Tax Basis= Initial Initial Cost Sold on Depreciation. (Derr Purchased Amount Cost - Depr. Allowed) Allowed on Office tables 4/4/2018 $3,000 $375 10/16/2019 For $2,900 11/8/2019 For $4,000 $825 Office chairs 3/1/2015 $8,000 $1,000 $2,200 Marketable securities 12/1/2019 2/1/2019 For $20,000 $12,000 $0 SO 11/29/2019 Land held for investment 7/1/2018 For $48,000 $45,000 $ $0 $0 In 2019 Dean sold his wine collection for $9,000, which is bought two years ago for $8,000. They also has a short-term capital loss carryover of $10,000 from 2009