[The following information applies to the questions displayed below.] During 2023, your clients, Mr. and Mrs. Howell, owned the following investment assets: Investment Assets Purchase Date Acquired Price Broker's Commission Paid at Time of Purchase 300 shares of IBM common (NYSE: IBM) 11/22/2020 $ 10,380 $ 100 200 shares of IBM common (NYSE: IBM) 4/3/2021 43,280 300 3,000 shares of Apple 12/12/2021 150,000 1,300 preferred (NASDAQ:AAPL) 2,100 shares of Cisco common (NASDAQ: CSCO) 8/14/2022 52,800 550 420 shares of Vanguard mutual fund 3/2/2023 15,000 No-load fund* *No commissions are charged when no-load mutual funds are bought and sold. Because of the downturn in the stock market, Mr. and Mrs. Howell decided to sell most of their stocks and the mutual fund in 2023 and to reinvest in municipal bonds. The following investment assets were sold in 2023: The Howells received a Form 1099-B from the Vanguard mutual fund reporting a $900 long- term capital gain distribution. This distribution was reinvested in 31 additional Vanguard mutual fund shares on 6/30/2023. In 2017, Mrs. Howell loaned $6,300 to a friend who was starting a new multilevel marketing company called LD3. The friend declared bankruptcy in 2023, and Mrs. Howell has been notified she will not be receiving any repayment of the loan. The Howells have a $2,600 short-term capital loss carryover and a $5,100 long-term capital loss carryover from prior years. The Howells did not instruct their broker to sell any particular lot of IBM stock. The Howells earned $3,150 in municipal bond interest, $3,150 in interest from corporate bonds, and $4,300 in qualified dividends. Assume the Howells have $137,500 of wage income during the year. Comprehensive Problem 07-63 Part a-3 (Algo) a-3. Compute the Howells' tax liability for the year (ignoring the alternative minimum tax and any phase-out provisions) assuming they file a joint return, they have no dependents, they don't make any special tax elections, and their itemized deductions total $30,000. (Use the tax rate schedules. Dividends and Capital Gains Tax Rates.) Howells' tax liability for the year $ 46,261 Tax Rates for Net Capital Gains and Qualified Dividends Investment Assets Broker's Commission Paid at Time of Date Sold Sale Price Sale Taxable Income Rate* 0% Married Filing Jointly $0-$89,250 Married Filing Separately $ 15% $89,251-$553,850 300 shares of IBM common 5/6 $ 100 20% $553,851+ $0-$44,625 $44,626-$276,900 $276,901+ 14,000 Single $0-$44,625 $44,626-$492,300 $492,301+ $3,001 - $14,650 $523,051+ *This rate applies to the net capital gains and qualified dividends that fall within the range of taxable income specified in the table (net capital gains and qualified dividends Head of Household $0 - $59,750 $59,751-$523,050 $523,051+ Trusts and Estates $0-$3,000 3,000 shares of Apple preferred 10/5 2,100 shares of Cisco common 8/15 221,700 63,280 2,000 650 451 shares of Vanguard mutual fund 12/21 16,000 No-load fund* *No commissions are charged when no-load mutual funds are bought and sold. The Howells' broker issued them a Form 1099-B showing the sales proceeds net of the commissions paid. For example, the IBM sales proceeds were reported as $13,900 on the Form 1099-B they received. In addition to the sales reflected in the table above, the Howells provided you with the following additional information concerning 2023: