Please note that part A have four choices. Problem 17-51 (LO. 4, 7) Sasha and Ta
ID: 2580350 • Letter: P
Question
Please note that part A have four choices. Problem 17-51 (LO. 4, 7) Sasha and Tara are married, iling jointly. Their correctly determined 2017 taxable income is $127,000. This taxable income includes a $5,000 § 1231 gain from the sale of business land that was part of their 22,000 of net long-term capital gain. None of the net long-term capital gain was from collectibles. Click here to access the tax rate schedules. If an amount is zero, enterO". If required, round your answer to the nearest dollar. in their income tax return, a. In addition to their Form 1040, the couple would inlude Form 4797, Form 8949, and Schedule A because they have a § 1231 gain that became part of their net long-term capital gain. b. Is any of the § 1231 gain unrecaptured § 1250 gain and subject to the 25% tax rate? Because business land was sold of the § 1231 gain is unrecaptured § 1250 gain subject to the 25% tax rate. c. Compute the couple's tax on taxable income by using the alternative tax on net capital gain method. The tax on ordinary taxable income is and the tax on the capital an is for a total tax of
Explanation / Answer
Answer to question no (a)
Since business land has been sold, so Sasha and Tara needs to file form 4979 along with form 1040. It mean that along with form 1040 Schedule C and form 4797 needs to be file.
Form 1040 is used for Individual Income Tax Return
Schedule C is for computing of income from business and profession
Form 4797 for providing details of business assets sold.
Answer to question no (b)
Total taxable income of Sasha and Tara includes $5,000 gain on sales of business aseets which fall under section 1231 and liable to tax at rate of 25%.
Answer to question no (c)
Capital Gain tax at a rate of 25% is $1,250 ($5,000x 25%)
Amount Tax Tax Amount 18,551 10% 1,855 56,749 15% 8,512 46,700 25% 11,675 1,22,000 22,042Related Questions
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