a) Tom is single in 2019 and has $70,000 of taxable income, which includes $50,000 of...

a) Tom is single in 2019 and has $70,000 of taxable income, which includes $50,000 of long-term capital gain.

b) Now suppose instead that Tom has 2019 taxable income of $70000 which includes only $20000 of long term capital

Expert Solution


	Tom
	Long Term Gain: Long term gain arises in case of sale of assets held for more than a Year
	Status:	Single
		Long Term Capital gain	Taxable Income(Including LTCG)	Long Term capital gain taxed rate
	a)	50000	70000	15%
	b)	20000	70000	15%
	In both cases taxable income =$70000, so same income tax slab is used for long term capital gain=15%
a)	Tax on Normal Income	970+($20000-$9700)*12%=	$ 2,206.00
	Tax on Long Term Capital Gain	($50000*15%)=	$ 7,500.00
		Total Tax	$ 9,706.00

b)	Tax on Normal Income	4543+($50000-$39475)*22%=	$ 6,858.50
	Tax on Long Term Capital Gain	($20000*15%)=	$ 3,000.00
		Total Tax	$ 9,858.50

	Long Term Capital Gains Slab for Single Taxapyer(2019)
	0%	0-$39375
	15%	$39376-$434550
	20%	$434551

	Single Filers
	Rate		Tax
	0-$9700	10%	$ 970.00
	$9701-$39475	12%	$ 3,573.00
	$39476-$84200	22%	$ 9,839.50
	Total Tax liability		$ 14,382.50

ekkarill92 answered 2 years ago

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