David, a single taxpayer with no dependents, has a $87,000 of taxable income for 2022. David won a lottery prize in 2021 and on the advice of his girlfriend he decided to invest in corporate bonds and stocks, rather than to splurge the winnings on a new car. He purchased a corporate bond at its face amount of $17,000 on 4/1/2022. The bond pays 6% interest each 3/31. Shortly after he purchased the bond, he broke up with his girlfriend and changed his mind about this transaction and decided not to hold on to it after all. On 8/31/2022, David sold the bond for $20,000.

How much is the total tax due on this transaction for David in 2022?

Instructions: Round your answer to the nearest dollar, and do not include cents, commas or dollar sign. For example: if the answer is 10000 simply write 10000 (and NOT $10,000, $10,000.00 or 10000.00)

Answer rating: 100% (QA)

To calculate the tax due on the sale of the corporate bond we first need to determin... View the full answer