Respond to the following independent situations: a. Jacob is a single taxpayer w

Question

Respond to the following independent situations: a. Jacob is a single taxpayer who has net investment income consisting of $15,500 interest on a certificate of deposit, $7,750 from dividends from a mutual fund, $7,750 from capital gain distributions from mutual funds, and $44,000 in long-term capital gains from selling some stocks and his MAGI is $180,000. (1) How much in surtax will Jacob be assessed on his Form 1040 for 2015? b. Jacob is a single taxpayer who has net investment income consisting of $15,500 interest on a certificate of deposit, $7,750 from dividends from a mutual fund, $7,750 from capital gain distributions from mutual funds, and $44,000 in long-term capital gains from selling some stocks and his MAGI is $237,000. (1) How much in surtax will Jacob be assessed on his Form 1040 for 2015? c. Jacob is a single taxpayer who has net investment income consisting of $37,000 interest on a certificate of deposit, $18,500 from dividends from a mutual fund, $18,500 from capital gain distributions from mutual funds, and $48,500 in long-term capital gains from selling some stocks and his MAGI is $322,500. (1) How much in surtax will Jacob be assessed on his Form 1040 for 2015?

Explanation / Answer

a) $0, No surtax will be assessed, since his MAGI is below threshhold limit of $200,000.

b) Investment income = 15500+7750+7750+44000 = $75,000

Excess of MAGI over threshhold limit (237000-200000) = $37000

Sur tax will be calculated on lower of the above two (37000*3.80%) = $1,406

c) Investment income = 37000+18500+18500+48500 = $122,500

Excess of MAGI over threshhold limit (322500-200000) = $122500

Sur tax will be calculated on lower of the above two (122500*3.80%) = $4,655

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.