During the current year, Ron and Anne sold the following assets: Capital Asset Market Value Tax Basis

Question:

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

Capital Asset

Market Value

Tax

Basis

Holding Period

 L stock

$50,000

$41,000

> 1 year

 M stock

28,000

39,000

> 1 year

 N stock

 30,000

22,000

< 1 year

 O stock

 26,000

33,000

< 1 year

 Antiques

 7,000

4,000

> 1 year

Rental home

 300,000*

90,000

> 1 year

*$30,000 of the gain is 25 percent gain (from accumulated depreciation on the property).


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 2018 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 2018 assuming they file a joint return?

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Taxation Of Individuals And Business Entities 2019 Edition

ISBN: 9781259918391

10th Edition

Authors: Brian C. Spilker, Benjamin C. Ayers, John Robinson, Edmund Outslay, Ronald G. Worsham, John A. Barrick, Connie Weaver

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