During $2024,$ your cllents, Mr$.$ and Mrs$.$ Howell, owned the following Investment assets:

$*$No commissions are charged when no$-$load mutual funds are bought and sold.

Because of the downturn in the stock market, Mr$.$ and Mrs$.$ Howell decided to sell most of thelr stocks and the mutual fund In $2024$ and to relnvest in municipal bonds. The following investment assets were sold in $2024$:

$*$No commisslons are charged when no$-$load mutual funds are bought and sold.

The Howells' broker Issued them a Form $1099-$B showing the sales proceeds net of the commissions pald. For example, the IBM sales proceeds were reported as $\backslash$$$14,000$ on the Form $1099-$B they recelved.

In addition to the sales reflected in the table above, the Howells provided you with the following additional information concerning $2024$:

$-$ The Howells recelved a consoldated Form $1099$ from the Vanguard mutual fund reporting a $\backslash (\backslash$$ $900\backslash )$ long$-$term capital gain distribution. This dividend was relnvested in $31$ additional Vanguard mutual fund shares on $6/30/2024.$

$-$ In $2018,$ Mrs$.$ Howell loaned $\backslash (\backslash$$ $6,400\backslash )$ to a frend who was starting a new multllevel marketing company called LD$3.$ The friend declared bankruptcy in $2024,$ and Mrs$.$ Howell has been notified she will not be recelving any repayment of the loan.

$-$ The Howells have a $\backslash$$$2,700$ short$-$term capital loss carryover and a $\backslash$$$5,200$ long$-$term capital loss carryover from prior years.

$-$ The Howells did not Instruct their broker to sell any particular lot of IBM stock.

$-$ The Howells earned $\backslash$$$3,200$ in municipal bond interest, $\backslash$$$3,200$ in interest from corporate bonds, and $\backslash$$$4,400$ in qualified dividends.

$-$ Assume the Howells have $\backslash (\backslash$$ $140,000\backslash )$ of wage income during the year.

Comprehensive Problem $07-63$ Part a$-3($Algo$)$

a$-3.$ Compute the Howells' tax liability for the year $($Ignoring the alternative minimum tax and any phase$-$out provisions$)$ assuming they file a joint return, they have no dependents, they don't make any special tax elections, and thelr itemized deductions total $\backslash (\backslash$$ $30,000\backslash ).($Use the tax rate schedules, Dividends and Capltal Galns Tax Rates.$)2024$ Tax Rate Schedules

Tmulnifoxts

Schedale X Single

Schedule Y$-1$ Married Filing Jointly or Qualifring surrining tpouse

Sthredute Z$-$Heal of Hogenehold

Schedtule Y$-2-$Married Filing Segarately Tax Rates for Net Capital Gains and Qualified Dividends

$*$This rate applies to the net capital gains and qualified dividends that fall within the range of taxable income specified in the table $($net capital gains and qualified dividends are included in taxable income last for this purpose$).$