Question

Joe earned $100,000 in salary and $6,000 in interest income during the year. Joe’s employer withheld $11,000 of federal income taxes from Joe’s paychecks during the year. Joe has one qualifying dependent child who lives with him. Joe qualifies to file as head of household and has $23,000 in itemized deductions.

Assume that in addition to the original facts ($106,000 of ordinary gross income), Joe sold Amazon shares that he bought for $6,000 on 1/1/18 for $10,000 on 12/31/19. You may use the book chapter 4, PowerPoints, or the IRS instructions to form 1040 (2019).

a. What is Joe’s tax refund or tax due including the tax on the capital gain? Please show work.

b. Copy and paste the capital tax gains table that you used to get the capital gains tax rate.

c. Find form 8949 for 2019.   Enter the details of the transaction in Part I or Part II, as appropriate. Assume that the brokerage firm reported both the basis and the sale to the IRS.

d. Find Schedule D for 2019. Please complete Part I and/or Part II. You can skip Part III.

e. Based on your answer to part 1, prepare t Form 1040.

Answer 1

Required a

Required b)

Income Level	Tax rate
Upto $52751	0%
$52,751 - $461,700	15%
Over $461,700	20%

Required c)'

Required d)

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