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

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)? a) Megan sold stock A for a short-term capital gain of $5,500; sold stock B for a short-term capital loss of $2,100. b) Margaret sold stock A for a short-term capital loss of 2,000; sold stock B for a short-term capital gain of $4,000. c) Melissa is 70 years old and withdraws $1,000 from her Roth IRA account. Would the answer be different if she were 65 years old? d) Morgan bought 100 shares of IBM in March for $100 a share and sold the shares in April for $110. e) Murphy contributed $4,000. The stock was subsequently sold for $4,500 after year had passed.

Explanation / Answer

a) Megan net amount for tax is $3400 ($5500-$2100)

As it is a capital gain for Megan than federal tax will be $510 ($3400*15/100)

b)Margaret net amount for tax is $2000 ($4000-$2000)

As it is a capital gain for Megan than federal tax will be $300 ($2000*15/100)

c) no there is no change in the answer.

d)Morgan net amount for tax is $1000 ($11000-$10000)

As it is a capital gain for Megan than federal tax will be $150 ($1000*15/100)

e)Murphy net amount for tax is $500 ($4500-$4000)

As it is a capital gain for Megan than federal tax will be $75 ($500*15/100)

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