Question

Required information Problem 7-45 (LO 7-2) [The following information applies to the questions displayed below.] Matt and Meg Comer are married and file a joint tax return. They do not have any children. Matt works as a history professor at a local university and earns a salary of $64,000. Meg works part-time at the same university. She earns $33,000 a year. The couple does not itemize deductions. Other than salary, the Comers' only other source of income is from the disposition of various capital assets (mostly stocks). (Use the tax rate schedules, Dividends and Capital Gains Tax Rates.) (Round your final answers to the nearest whole dollar amount.) Problem 7-45 Part-a a. What is the Comers' tax liability for 2019 if they report the following capital gains and losses for the year? Short-term capital gains Short-term capital losses Long-term capital gains Long-term capital losses $ 9,000 (2,000) 15,000 (6,000) Total tax liability

Answer 1

Compute total tax liability for 2019 as follows: Amount $64,000 $33,000 $7,000 Particulars Matt's Salary Meg's Salary Net Short term Capital gain(9000- 2000) Net Long Term Capital gain(15000- 6000) Annual Gross Income Less: Standard Deduction Taxable Income Less: Income taxed at prefential tax rate Income Taxed at ordinary rate Income Tax Due (9086+(22%x(79600-78950)) Long Term Liability(9000x15%) Total Tax Liability $9,000 $113,000 -$24.400 $88,600 -$9,000 $79,600 $9.229 $1,350 $10,579 Tax rates for 2019 are as follows: Tax Owed Tax Rate (Married Marginal Filing Jointly) Tax Rate 0-19400 10% 19400-78950 78950-168400 168400-321450 24% 12% SIC 10% of taxable Income $1940+12%of income over $19400 $9086+22% of Income over $78950 $28765+24% of Income over $168400 22%