Self-Study Problem 4.4In October 2020, Jack, a single taxpayer, sold IBM stock for $12,000, which he purchased 4 years ago for $4,000. He also sold GM stock for $14,000, which cost $17,500 3 years ago, and he had a short-term capital loss of $1,800 on the sale of land. The tax rates on long-term capital gains are as follows: Income LevelLong-TermCapital Gains RatesMarried filing jointly $0–$80,0000%$80,001–$496,60015%> $496,60020%Single $0–$40,0000%$40,001–$441,45015%> $441,45020%Head of household $0–$53,6000%$53,601–$469,05015%> $469,05020% If Jack's other taxable income (salary) is $78,000, what is the amount of Jack's tax on these capital transactions?$fill in the blank 1

Disposable income is the income that is left after paying taxes. Taxes can be direct or indirect…

Answered: In October 2020, Jack, a single…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

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Self-Study Problem 4.4

In October 2020, Jack, a single taxpayer, sold IBM stock for $12,000, which he purchased 4 years ago for $4,000. He also sold GM stock for $14,000, which cost $17,500 3 years ago, and he had a short-term capital loss of $1,800 on the sale of land.

The tax rates on long-term capital gains are as follows:

Income Level	Long-Term Capital Gains Rates
Married filing jointly
$0–$80,000	0%
$80,001–$496,600	15%
> $496,600	20%
Single
$0–$40,000	0%
$40,001–$441,450	15%
> $441,450	20%
Head of household
$0–$53,600	0%
$53,601–$469,050	15%
> $469,050	20%

If Jack's other taxable income (salary) is $78,000, what is the amount of Jack's tax on these capital transactions?
$fill in the blank 1

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