Matt and Meg Comer are married. They do not have any children. Matt works as a h
ID: 2421100 • Letter: M
Question
Matt and Meg Comer are married. 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 $21,000 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). (Use the tax rate schedules.)
a. What is the Comers’ tax liability for 2015 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 )
b. What is the Comers’ tax liability for 2015 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 )
Explanation / Answer
Answer:a
Total tax liability=$9787.5+$0=9787.5
Answer:b
Total tax liability=$8962.5+0=8962.5
Salary 85000 Net short-term capital gain 7000 Net long-term capital gain 9000 AGI 101000 Standard deduction 12600 Personal exemption 8000 Taxable income 80400 Less preferentially taxed income 9000 Income taxed at ordinary rates 71400 1845+7942.5 tax=$9787.5 Income subject to capital gains rates 9000 tax ($9,000 × 0%) = $0