During 2019, Addison, a single taxpayer, has the following gains and losses:
LTCG$10,000
LTCL3,000
STCG2,000
STCL7,000
?
a.How much is Addison’s tax liability if she has taxable income of $24,000 andis in the 12% tax bracket?b.How much is her tax liability if her taxable income is $188,000 and her tax bracket is 32% (not 12%)?
What will be an ideal response?
| a.?? | $0. After the initial netting process, there is a LTCG of $7,000 and a STCL of $5,000. The $5,000 of STCL is applied to the LTCG of $7,000. The final result is a net LTCG of $2,000 taxed at 0% for a tax liability of $0. |
| b.? | $300. See part a. for the netting process. Now the $2,000 is taxed at 15% for a tax liability of $300. |
You might also like to view...
Treating the taxes paid each year as an expense in the income statement could result in an inappropriate matching between pre-tax book income and income tax expense.
Answer the following statement true (T) or false (F)
Which one of the following types of costs should be included in the cost of a manufactured inventory?
A) abnormal spoilage B) production supervisory salaries C) interest costs D) selling costs
________ advertising aims to convince current purchasers that they made the right choice
A) Persuasive B) Informational C) Reinforcement D) Reminder E) Comparative
________ advertising promotes the company as a whole instead of the firm's individual products
A) Advocacy B) Public service C) Public relations D) Corporate E) Testimonial