Mr. and Mrs. Lay’s taxable income is $679,400, which includes a $22,070 dividend on their investment in Rexford Mutual Fund. Mr. and Mrs. Lay’s marginal rate on ordinary income is 37 percent, and their entire Rexford dividend is subject to the Medicare contribution tax. Use Individual tax rate schedules and Tax rates for capital gains and qualified dividends.

Required:

1. Compute the Lays' total tax on this dividend if their Form 1099 from Rexford reported that the entire $22,070 was an ordinary dividend.
2. Compute the Lays' total tax on this dividend if their Form 1099 from Rexford reported that $17,580 was an ordinary dividend and $4,490 was a capital gain distribution.
3. Compute the Lays' total tax on this dividend if their Form 1099 from Rexford reported that $6,970 was an ordinary dividend, $10,660 was a qualified dividend distribution, and $4,440 was a capital gain distribution.

Answer rating: 100% (QA)

1 Mr lays tax is on 22070 37 8166 Medicare contribution income tax 22070 38 839 ... View the full answer