In December, 2012, Ben and Jeri (married, filing jointly) have a long-term capital gain of $55,000 on the sale of stock held for 4 years. They have no other capital gains and losses for the year. After standard deduction and personal exemptions, their ordinary income for the year is $70,700, making their total income for the year $125,700, ($70,700 + $55,000). In 2012, married taxpayers pay tax of $9,741 at 10 percent and 15 percent rates (from the tax table) on the first $70,700 of ordinary taxable income and 25 percent on ordinary taxable income up to $142,700. What is their total tax liability?

Answer rating: 100% (QA)

The tax liability is 9741 8250 17991 The 9741 is the tax on their ordinary income of 70700 from ... View the full answer