The Gabriel family tells you the following regarding their current tax situation: Their salary is $75,000. They paid real estate taxes of $4,000 and interest on their mortgage of $3,000. They earned $1,500 from a Cortland Water bond. They made $2,000 on the sale of a property they owned for 5 months. They also made $5,000 on the sale of AES stock they purchased 4 years ago. The couple has three children. Exemptions are $4,000/person.

a. WHAT IS THEIR TAXABLE INCOME? SHOW YOUR WORK STEP BY STEP.

b. Use the tax table below to determine their total tax liability. SHOW YOUR WORK.

Taxable Income		Tax Rate
Up to $25,000		10%
$25,000 -$40,000		15%
$40,000 - $55,000		20%
$55,000-$70,000		25%
over $70,000		35%

c. What is the family's marginal rate?

d. What is the family's average rate? Show your calculation.