Tina, whose marginal tax rate is 32%, has the following capital gains this year:STCG$20,000LTCG (Facebook stock)40,000LTCG (qualified small business stock acquired in 2005)20,000LTCG (artwork)10,000What is the increase in income tax caused by these items (ignore the Medicare tax on net investment income)?
What will be an ideal response?
| Tax on STCG: | $20,000 × .32 = $6,400 |
| Tax on LTCG-Facebook stock-ANCG | $40,000 × .15 = 6,000 |
| Tax on LTCG-QSBS-.50 × 20,000 = | $10,000 × .28 = 2,800 |
| Tax on LTCG-artwork-Collectible gain | $10,000 × .28 = 2,800 |
| Total increase in tax | $18,000 |
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What will be an ideal response?
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