During the current year, Ron and Anne sold the following assets:

a) Given that Ron and Anne have taxable income of only $20,000 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2015 assuming they file a joint return?
b) Given that Ron and Anne have taxable income of $400,000 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2015 assuming they file a joint return?

Transcribed Image Text:

Capital Asset Market Value Tax Basis Holding Period $ 50,000 28,000 30,000 26,000 7,000 300,000* $41,000 39,000 22,000 33,000 4,000 90,000 >1 year L stock M stock <1 year N stock O stock Antiques Rental home <1 year >1 year >1 year