Jane, a single individual, earned salaries and wages of $59,000 and interest $2,
ID: 2581652 • Letter: J
Question
Jane, a single individual, earned salaries and wages of $59,000 and interest $2,000 and dividends of $1,700 for the current year. In addition, Jane sold the following capital assets:
100 shares of GHJ common stock, held 14 months………. $3,400 gain
1955 Ford pickup, used five years for personal purposes…. 4,500 gain
30 acres of land, held three years for investment………….. 6,200 loss
a. Compute Jane’s net capital gain or loss.
b. Compute Jane’s adjusted gross income. At what rate will the capital gain or loss from part a be taxed?
Explanation / Answer
Hi,
A) net capital gain/loss
3400+4500 = 7900
Loss on sale of land cannot be considered as it need to get set off with profit on sale of land held for investment.
B) Gross income=70600(59000+2000+1700+7900)
As Jane is filing as an individual , the assessee will be in 25% tax bracket
Commonon stock needs to be charged 15% as it is held for more than 1 year and the individual is at 25% tax bracket.
Ford pickup bring classified as unrecaptured sec 1250 cap gain taxed at 25%
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