Question

Chapter 16 - Question 6 : Thank you
2018 Tax Rate Schedules :
Single—Schedule X Head of household—Schedule Z If taxable income is: Over— But not over— The tax is: of the amount over— If taxable income is: Over— But not over— The tax is:
of the amount over— $             0 $    9,525 ………10% $              0 $             0 $ 13,600 ………10% $             0 9,525 38,700 $        952.50 1 12% 9,525 13,600 51,800 $     1,360.00 1 12% 13,600 38,700 82,500 4,453.50 1 22% 38,700 51,800 82,500 5,944.00 1 22% 51,800 82,500 157,500 14,089.50 1 24% 82,500 82,500 157,500 12,698.00 1 24% 82,500 157,500 200,000 32,089.50 1 32% 157,500 157,500 200,000 30,698.00 1 32% 157,500 200,000 500,000 45,689.50 1 35% 200,000 200,000 500,000 44,298.00 1 35% 200,000 500,000 ……… 150,689.50 1 37% 500,000 500,000 ……… 149,298.00 1 37% 500,000 Married filing jointly or Qualifying widow(er)— Schedule Y–1 Married filing separately—Schedule Y–2 If taxable income is: Over— But not over— The tax is: of the amount over— If taxable income is: Over— But not over— The tax is: of the amount over— $             0 $ 19,050 ………10% $              0 $             0 $    9,525 ………10% $             0 19,050 77,400 $     1,905.00 1 12% 19,050 9,525 38,700 $      952.50 1 12% 9,525 77,400 165,000 8,907.00 1 22% 77,400 38,700 82,500 4,453.50 1 22% 38,700 165,000 315,000 28,179.00 1 24% 165,000 82,500 157,500 14,089.50 1 24% 82,500 315,000 400,000 64,179.00 1 32% 315,000 157,500 200,000 32,089.50 1 32% 157,500 400,000 600,000 91,379.00 1 35% 400,000 200,000 300,000 45,689.50 1 35% 200,000 600,000 ……… 161,379.00 1 37% 600,000 300,000 ……… 80,689.50 1 37% 300,000

Chapter 16 - Question 6 : I got the similar question from the Chegg, but I am still don't understand. Please, help me on the explain how to get the resutl on each calculate. Than you Jane and Blair are married taxpayers filing jointly and have 2018 taxable income of $107,000. The taxable income includes $5,000 of gain from a capital asset held five years, $2,100 of gain from a capital asset held seven months, and $13,000 of gain from a capital asset held four years. All of the capital assets were stock in publicly traded corporations. Jane and Blair also have qualified dividend income of $3,000. Click here to access the tax rate schedules to use for this problem. Indicate whether the following items are subject to the alternative tax computation. Select "Yes" if subject to the alternative tax computation; otherwise select "No". a. $5,000 of gain from a capital asset held five years_____ b. $13,000 of gain from a capital asset held four years _____ c. $3,000 of qualified dividend income _____ d. $2,100 of gain from a capital asset held seven months_____ The couple's tax on taxable income using the alternative tax calculations is $_____. The related tax savings from the alternative tax computation is $_____.

Answer 1

a. $5,000 of gain from a capital asset held five years is not subjected to AMT , even though Jane and Blair;s capital gains aren't subject to AMT tax rates but they do get added into the income that gets used for AMT calculations.

Ans : No

b.  $13,000 of gain from a capital asset held four years is not subjected to be taxed at AMT rates of 26%-28%, even though Jane and Blair;s capital gains aren't subject to AMT tax rates but they do get added into the income that gets used for AMT calculations.

Ans : No

c.$3,000 of qualified dividend income  is not subjected to be taxed at AMT rates of 26%-28% but at federal tax rates less than 20%, even though Jane and Blair;s capital gains aren't subject to AMT tax rates but they do get added into the income that gets used for AMT calculations.

Ans : No

d. $2,100 of gain from a capital asset held seven months,

Capital asset held for leass than 12 months is a short term capital asset, Short term capital asset is not excluded from AMT. Hence thet are subjected to AMT.

ANs : yes

As per the answering poilicy first 4 question is answered