Jillian, a single taxpayer, had the following sales of Sec. 1231 property this year:Sale of land A at a gain of $15,000Sale of land B at a gain of $12,000Sale of land C at a loss of $8,000a.Assume Jillian has taxable income from other sources exceeding $500,000. What is the amount of her resulting tax liability on the property sales?b.Assume instead that Jillian's taxable income from other sources is less than $15,000. What is the amount of her resulting tax liability on the property sales?c. Assume instead that Jillian's taxable income from other sources is in the 24% tax bracket. What is the amount of her resulting tax liability on the property sales?
What will be an ideal response?
| a. | The net 1231 gain is $15,000 + $12,000 - $8,000 = $19,000. At Jillian's level of taxable income, the |
| b. | There is no tax on capital gains for taxpayers with taxable income below $38,600. |
| c. | Because Jillian is in the 24% tax bracket, it is taxed at 15%. Thus, the tax is $19,000 × .15 = $2,850. |
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