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Without considering the following capital gains and losses, Cathy, who is single, has taxable income of $325,000 and a marginal tax rate of 35%. During
Without considering the following capital gains and losses, Cathy, who is single, has taxable income of $325,000 and a marginal tax rate of 35%. During the year, she sold stock held for nine months at a gain of $11,000; stock held for three years at a gain of $12,000; and a collectible asset held for six years at a gain of $23,000. Ignore the effect of the gains on any threshold amounts. a. What is her taxable income and the increase in her income tax liability after considering the three gains? b. In addition to the above three sales, assume that she sells another asset and has a short-term capital loss (STCL) of $13,000. What is her taxable income and the increase in her tax liability after considering the four transactions? c. d. In addition to the above three sales in Part a, assume that she sells another collectible asset held seven years as an investment and has a $29,000 capital loss. What is her taxable income and the increase in her tax liability after considering the four transactions? Determine her Medicare tax on net investment income in (a) if all of the $325,000 of taxable income is due to salary
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