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

*$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 2016 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 2016 assuming they file a joint return?

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Capital Market Value S50,000 28,000 30,000 26,000 7,000 Tax Holding Period Asset Basis L stock M stock N stock O stock Antiques Rental home300,000* $41,000 39,000 22,000 33,000 4.000 90.000 > 1 year 1 vear < 1 year < 1 year vear vear