Question: n 2 0 0 5 , Mr . Earl, a single taxpayer, contributed $ 4 5 , 0 0 0 in exchange for 5 0

2005,

.

Earl, a single taxpayer, contributed $

45, 000

in exchange for

500

shares of DB stock. In

2008,

he paid $

40, 000

to another shareholder to purchase

1, 000

more DB shares. All DB

s stock qualified as Section

1244

stock when it was issued. This year, Mr

.

Earl sold all

1, 500

DB shares for $

16

per share. His only income item was his $

80, 000

salary. Assume the taxable year is

2024 .

Required:

Compute Mr

.

Earl

s AGI.

What is Mr

.

Earl

s AGI if he also recognized a $

20, 000

capital gain on the sale of other securities

?

Required:

Compute Ms

.

Ennis

s income tax and Medicare contribution tax for the year.

How would the computation change if Ms

.

Ennis acquired the Seta stock in

2011

instead of

2000 ?

How would the computation change if Ms

.

Ennis acquired the Seta stock in

2022

instead of

2000 ?

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