What is the federal income tax owed by an investor in the 35% income tax bracket

ID: 2492921 • Letter: W

Question

What is the federal income tax owed by an investor in the 35% income tax bracket (15 % tax rate on long-term capital gains and dividend income)?

1. Bob - owns stock A that paid $350 in dividends and sold Stock B for a lont-term capital gain of $1200

2. Bill - sold stock A for a short-term capital gain of $3500 and sold Stock B for a short-term capital loss of $3100

3. Brian - sold stock A for a long-term capital gain of $3700 and sold Stock B for a long-term capital loss of $5100

4. Barbara sold stock A for $6000 short-term loss and sold stock B for a $2000 long-term gain

5. Roberta's savings account paid annual interest of $1000 and a stock that paid a dividend of $1000

PLEASE SHOW WORK

1. Amount of Tax = (350 x 15%) + (1200 x 15%) = $232.5

2. Amount of Tax = (3500 - 3100) x 35% = $140

3. Amount of Tax = (3700 - 5100) x 35% = -$490

It means it will reduce taxes by $490

4. Amount of Tax = (2000 - 6000) x 35% = -$1400

It means it will reduce taxes by $1500

5. Amount of Tax = (1000 x 35%) + (1000 x 15%) = $500

Interest Income taxed at 35% and Dividend Income taxed at 15%

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