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 $70,200. Meg works part-time at the same university. She earns $33,200 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). a. What is the Comers’ tax liability for 2021 if they report the following capital gains and losses for the year? Short-term capital gains $ 12,000 Short-term capital losses (5,000) Long-term capital gains 18,000 Long-term capital losses (9,000) b. What is the Comers’ tax liability for 2021 if they report the following capital gains and losses for the year? Short-term capital gains $ 1,500 Short-term capital losses 0 Long-term capital gains 16,000 Long-term capital losses (13,000)
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 $70,200. Meg works part-time at the same university. She earns $33,200 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).
a. What is the Comers’ tax liability for 2021 if they report the following
Short-term capital gains $ 12,000
Short-term capital losses (5,000)
Long-term capital gains 18,000
Long-term capital losses (9,000)
b. What is the Comers’ tax liability for 2021 if they report the following capital gains and losses for the year?
Short-term capital gains $ 1,500
Short-term capital losses 0
Long-term capital gains 16,000
Long-term capital losses (13,000)
| Salary of Matt | 70200 |
| Salary of Meg | 33200 |
|
Short term capital gain less short term capital loss (12000-5000) |
7000 |
|
Long term Capital gain less long term capital loss (18000-9000) |
9000 |
| Taxable income | 119400 |
Since the taxable income is between the range og $80800-$501600, Long term capital gain of $9000 shall be taxed at 15%
Therefore, tax on long term capital gain
= 15% x $9000= $1350
Taxable income other than long term capital gain = 119400-9000= $110400
Tax liabilty on ordinary income
= 19900x 10% + (81050-19900)x 12%
+(110400-81050)x22%
= 1990+7338+6457 = 15785
Total tax liability = $1350+$15785
=$17135
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