Multiple Choice 4-11 Net Capital Gains (LO 4.4) In November 2022, Ben and Betty (married, filing jointly) have a long-term capital gain of $54,000 on the sale of stock. They have no other capital gains and losses for the year. Their ordinary income for the year after the standard deduction is $72,500, making their total taxable income for the year $126,500 ($72,500 + $54,000). In 2022, married taxpayers pay 0 percent on long-term gains up to $83,350. What will be their 2022 total tax liability assuming a tax of $8,292 on the $72,500 of ordinary income? The tax rates on long-term capital gains are as follows: Income Level Married filing jointly $0-$83,350 $83.351-$517,600 > $517,600 X a. $15.160 O b. $8,100 Oc. $14.765 O d. $0 Feedback Long-Term Capital Gains Rates 0% 15% 20% Check My Work In recent years, the tax rates on long-term and short-term capital gains have become complex. Short-term capital gains are taxed as ordinary income, while there are various different preferential long-term capital gains tax rates. If a taxpayer has a "net capital gain" (net long-term capital gain in excess of net short-term capital loss), the gain is subject to a preferential tax rate. Thus, a taxpayer has to net all of the long-term and short-term capital transactions that take place during a year to calculate tax liability. The tax on the ordinary income and the tax on the capital gains are added together. The tax on the long-term capital gains depends on the taxpayer's ordinary tax bracket.
Multiple Choice 4-11 Net Capital Gains (LO 4.4) In November 2022, Ben and Betty (married, filing jointly) have a long-term capital gain of $54,000 on the sale of stock. They have no other capital gains and losses for the year. Their ordinary income for the year after the standard deduction is $72,500, making their total taxable income for the year $126,500 ($72,500 + $54,000). In 2022, married taxpayers pay 0 percent on long-term gains up to $83,350. What will be their 2022 total tax liability assuming a tax of $8,292 on the $72,500 of ordinary income? The tax rates on long-term capital gains are as follows: Income Level Married filing jointly $0-$83,350 $83.351-$517,600 > $517,600 X a. $15.160 O b. $8,100 Oc. $14.765 O d. $0 Feedback Long-Term Capital Gains Rates 0% 15% 20% Check My Work In recent years, the tax rates on long-term and short-term capital gains have become complex. Short-term capital gains are taxed as ordinary income, while there are various different preferential long-term capital gains tax rates. If a taxpayer has a "net capital gain" (net long-term capital gain in excess of net short-term capital loss), the gain is subject to a preferential tax rate. Thus, a taxpayer has to net all of the long-term and short-term capital transactions that take place during a year to calculate tax liability. The tax on the ordinary income and the tax on the capital gains are added together. The tax on the long-term capital gains depends on the taxpayer's ordinary tax bracket.
Chapter17: Property Transactions: § 1231 And Recapture Provisions
Section: Chapter Questions
Problem 51P
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Transcribed Image Text:Multiple Choice 4-11
Net Capital Gains (LO 4.4)
In November 2022, Ben and Betty (married, filing jointly) have a long-term capital gain of $54,000 on the sale of stock. They have no other capital gains and losses for the year. Their ordinary income for the year after the standard deduction is $72,500, making their total taxable income for the year $126,500
($72,500 + $54,000). In 2022, married taxpayers pay 0 percent on long-term gains up to $83,350. What will be their 2022 total tax liability assuming a tax of $8,292 on the $72,500 of ordinary income?
The tax rates on long-term capital gains are as follows:
Income Level
Married filing jointly
$0-$83,350
$83,351-$517,600
> $517,600
xa. $15,160
O b. $8,100
O c. $14,765
O d. $0
Feedback
Long-Term
Capital Gains Rates
0%
15%
20%
Check My Work
In recent years, the tax rates on long-term and short-term capital gains have become complex. Short-term capital gains are taxed as ordinary income, while there are various different preferential long-term capital gains tax rates.
If a taxpayer has a "net capital gain" (net long-term capital gain in excess of net short-term capital loss), the gain is subject to a preferential tax rate. Thus, a taxpayer has to net all of the long-term and short-term capital transactions that take place during a year to calculate tax liability.
The tax on the ordinary income and the tax on the capital gains are added together. The tax on the long-term capital gains depends on the taxpayer's ordinary tax bracket.
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ISBN:
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Author:
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CENGAGE LEARNING - CONSIGNMENT