In: Accounting
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During the current year, Ron and Anne sold the following assets: (Use the dividends and capital gains tax rates and tax rate schedules.)
Capital Asset | Market Value | Tax Basis | Holding Period | ||
L stock | $ | 50,000 | $ | 41,000 | > 1 year |
M stock | 28,000 | 39,000 | > 1 year | ||
N stock | 30,000 | 22,000 | < 1 year | ||
O stock | 26,000 | 33,000 | < 1 year | ||
Antiques | 7,000 | 4,000 | > 1 year | ||
Rental home | 300,000* | 90,000 | > 1 year | ||
*$30,000 of the gain is 25 percent gain (from accumulated
depreciation on the property).
Ignore the Net Investment Income Tax.
a. Given that Ron and Anne have taxable income of only $20,000 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2020 assuming they file a joint return? (Round all your intermediate computations to the nearest whole dollar amount.)
Gross tax Liability=