Mr. Carp, a single taxpayer, recognized a $44,000 long-term capital gain, a $12,000 short-term capital gain, and a $10,000 long-term capital loss. Compute Mr. Carp's 2019 income and Medicare contribution tax if his taxable income before consideration of his capital transactions is $465,000, none of which is investment income
What will be an ideal response?
Net long-term capital gain is $34,000 ($44,000 - $10,000). Taxable income is $511,000 ($465,000 + $34,000 + $12,000) of which $477,000 ($465,000 + $12,000) is taxed as ordinary income and $34,000 is taxed at 20%. Total income tax is $148,944 ($142,144 on ordinary income + $6,800 on long-term capital gain). Medicare contribution tax is $1,748 ($46,000 net capital gain taxed at 3.8%).
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What will be an ideal response?
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