Chapter 7, Problem 45P

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 $64,000. Meg works part-time at the same university. She earns $33,000 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).

1. a) What is the Comers’ tax liability for 2019 if they report the following capital gains and losses for the year?

Short-term capital gains    $ 9,000

Short-term capital losses    (2,000)

Long-term capital gains    15,000

Long-term capital losses    (6,000)

1. b) What is the Comers’ tax liability for 2019 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    13,000

Long-term capital losses    (10,000)