Tax Rates for Net Capital Gains and Qualified Dividends Rate* 0% 15% 20% Married Filing Jointly...

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Tax Rates for Net Capital Gains and Qualified Dividends Rate* 0% 15% 20% Married Filing Jointly $0 - $83,350 $83,351 - $517,200 $517,201+ Married Filing Separately $0-$41,675 $41,676 $258,600 Taxable Income $258,601+ Single $0-$41,675 $41,676 $459,750 - Head of Household $0-$55,800 $55,801 - $488,500 $488,501+ Trusts and Estates $0-$2,800 $2,801 - $13,700 $13,701+ $459,751+ *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). 2022 Tax Rate Schedules Individuals Schedule X-Single If taxable income is over: But not over: $ 10,275 $ 41,775 $ 89,075 $ 170,050 $ 215,950 $539,900 $ $ 10,275 $ 41,775 $ 89,075 $ 170,050 $215,950 $ 539,900 The tax is: 10% of taxable income $1,027.50 plus 12% of the excess over $10,275 $4,807.50 plus 22% of the excess over $41,775 $15,213.50 plus 24% of the excess over $89,075 $34,647.50 plus 32% of the excess over $170,050 $49,335.50 plus 35% of the excess over $215,950 $162,718 plus 37% of the excess over $539,900 Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) If taxable income is over: But not over: $ 0 $ 20,550 $ 83,550 $ 178,150 $ 340,100 $431,900 $ 647,850 $ 20,550 $ 83,550 $ 178,150 $ 340,100 $ 431,900 $ 647,850 The tax is: 10% of taxable income $2,055 plus 12% of the excess over $20,550 $9,615 plus 22% of the excess over $83,550 $30,427 plus 24% of the excess over $178,150 $69,295 plus 32% of the excess over $340,100 $98,671 plus 35% of the excess over $431,900 $174,253.50 plus 37% of the excess over $647,850 Schedule Z-Head of Household If taxable income is over: But not over: $ 0 $ 14,650 $ 14,650 $ 55,900 $ 89,050 $ 170,050 $215,950 $539,900 $ 55,900 $ 89,050 $ 170,050 $ 215,950 $ 539,900 Schedule Y-2-Married Filing Separately If taxable income is over: But not over: $ 10,275 $ 41,775 $ 89,075 $ 170,050 $215,950 $ 323,925 $ 0 $ 10,275 $ 41,775 $ 89,075 $ 170,050 $215,950 $323,925 The tax is: 10% of taxable income $1,465 plus 12% of the excess over $14,650 $6,415 plus 22% of the excess over $55,900 $13,708 plus 24% of the excess over $89,050 $33,148 plus 32% of the excess over $170,050 $47,836 plus 35% of the excess over $215,950 $161,218.50 plus 37% of the excess over $539,900 The tax is: 10% of taxable income $1,027.50 plus 12% of the excess over $10,275 $4,807.50 plus 22% of the excess over $41,775 $15,213.50 plus 24% of the excess over $89,075 $34,647.50 plus 32% of the excess over $170,050 $49,335.50 plus 35% of the excess over $215,950 $87,126.75 plus 37% of the excess over $323,925 ! Required information [The following information applies to the questions displayed below.] During the current year, Ron and Anne sold the following assets: (Use the dividends and capital gains tax rates and tax rate schedules.) Capital Asset L stock M stock N stock 0 stock Antiques Rental home Market Value $ 50,000 28,000 30,000 26,000 7,000 300,000* Tax Basis $ 41,000 39,000 22,000 33,000 4,000 90,000 Gross tax liability Holding Period > 1 year > 1 year < 1 year < 1 year > 1 year > 1 year *$30,000 of the gain is 25 percent gain (from accumulated depreciation on the property). Ignore the Net Investment Income Tax. 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 2022 assuming they file a joint return? Tax Rates for Net Capital Gains and Qualified Dividends Rate* 0% 15% 20% Married Filing Jointly $0 - $83,350 $83,351 - $517,200 $517,201+ Married Filing Separately $0-$41,675 $41,676 $258,600 Taxable Income $258,601+ Single $0-$41,675 $41,676 $459,750 - Head of Household $0-$55,800 $55,801 - $488,500 $488,501+ Trusts and Estates $0-$2,800 $2,801 - $13,700 $13,701+ $459,751+ *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). 2022 Tax Rate Schedules Individuals Schedule X-Single If taxable income is over: But not over: $ 10,275 $ 41,775 $ 89,075 $ 170,050 $ 215,950 $539,900 $ $ 10,275 $ 41,775 $ 89,075 $ 170,050 $215,950 $ 539,900 The tax is: 10% of taxable income $1,027.50 plus 12% of the excess over $10,275 $4,807.50 plus 22% of the excess over $41,775 $15,213.50 plus 24% of the excess over $89,075 $34,647.50 plus 32% of the excess over $170,050 $49,335.50 plus 35% of the excess over $215,950 $162,718 plus 37% of the excess over $539,900 Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) If taxable income is over: But not over: $ 0 $ 20,550 $ 83,550 $ 178,150 $ 340,100 $431,900 $ 647,850 $ 20,550 $ 83,550 $ 178,150 $ 340,100 $ 431,900 $ 647,850 The tax is: 10% of taxable income $2,055 plus 12% of the excess over $20,550 $9,615 plus 22% of the excess over $83,550 $30,427 plus 24% of the excess over $178,150 $69,295 plus 32% of the excess over $340,100 $98,671 plus 35% of the excess over $431,900 $174,253.50 plus 37% of the excess over $647,850 Schedule Z-Head of Household If taxable income is over: But not over: $ 0 $ 14,650 $ 14,650 $ 55,900 $ 89,050 $ 170,050 $215,950 $539,900 $ 55,900 $ 89,050 $ 170,050 $ 215,950 $ 539,900 Schedule Y-2-Married Filing Separately If taxable income is over: But not over: $ 10,275 $ 41,775 $ 89,075 $ 170,050 $215,950 $ 323,925 $ 0 $ 10,275 $ 41,775 $ 89,075 $ 170,050 $215,950 $323,925 The tax is: 10% of taxable income $1,465 plus 12% of the excess over $14,650 $6,415 plus 22% of the excess over $55,900 $13,708 plus 24% of the excess over $89,050 $33,148 plus 32% of the excess over $170,050 $47,836 plus 35% of the excess over $215,950 $161,218.50 plus 37% of the excess over $539,900 The tax is: 10% of taxable income $1,027.50 plus 12% of the excess over $10,275 $4,807.50 plus 22% of the excess over $41,775 $15,213.50 plus 24% of the excess over $89,075 $34,647.50 plus 32% of the excess over $170,050 $49,335.50 plus 35% of the excess over $215,950 $87,126.75 plus 37% of the excess over $323,925 ! Required information [The following information applies to the questions displayed below.] During the current year, Ron and Anne sold the following assets: (Use the dividends and capital gains tax rates and tax rate schedules.) Capital Asset L stock M stock N stock 0 stock Antiques Rental home Market Value $ 50,000 28,000 30,000 26,000 7,000 300,000* Tax Basis $ 41,000 39,000 22,000 33,000 4,000 90,000 Gross tax liability Holding Period > 1 year > 1 year < 1 year < 1 year > 1 year > 1 year *$30,000 of the gain is 25 percent gain (from accumulated depreciation on the property). Ignore the Net Investment Income Tax. 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 2022 assuming they file a joint return?

Answer rating: 100% (QA)

To calculate Ron and Annes gross tax liability for 2022 we need to determine the tax on their ordinary income and the tax on their net capital gains and qualified dividends 1 Tax on Ordinary Income Si... View the full answer