Question

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 $68,000. Meg works part time at the same university. She earns $35,500 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.)

a. What is the Comers’ tax liability for 2020 if they report the following capital gains and losses for the year?

Short-term capital gains $ 11,500

Short-term capital losses (4,500)

Long-term capital gains 17,500

Long-term capital losses (8,500)

b. What is the Comers’ tax liability for 2020 if they report the following capital gains and losses for the year?

Short-term capital gains	$	1,000
Short-term capital losses		0
Long-term capital gains		15,500
Long-term capital losses		(12,500	)

Answer 1

	Taxable Income
1	Matts salary	68000
	Megs		35500
	STCG	11500
	STCL	4500	7000
	LTCG	17500
	LTCL	8500	9000
	GROSS INCOME	119500
LESS standard deduction	24800
	Taxable income	94700
	tax on	94700-9000	85700
	tax on	ltcg	9000
									8
	Tax on 86100=9235+(85700-80251)*.22		10434
	ltcg	1350			1350
		total tax			11784
2	Matts salary	68000
	Megs		35500
	STCG	1000
	STCL	0	1000
	LTCG	15500
	LTCL	12500	3000
	GROSS INCOME	107500
less Standard deduction	24800
Taxable income		82700
Taxable income exculding Ltcg	79700
Tax on 79700=	1975+(79700-19751)*12	9168.88
	LTCG on 3000		0
	total tax			9168.88