Problem 16-03 [LO 16-1, 16-9] Diane Stacy, who has a 33 percent marginal income
ID: 2581089 • Letter: P
Question
Problem 16-03 [LO 16-1, 16-9]
Diane Stacy, who has a 33 percent marginal income tax rate and a 3.8 percent Medicare contribution tax rate on investment income, owns 13,800 shares in Tobler Mutual Fund. This year, she received an $88,400 dividend from Tobler. Assume the taxable year is 2017.
a. Compute Diane’s total federal tax on this income if her Form 1099 from Tobler reported that the entire dividend was a qualified dividend distribution.
b. Compute Diane’s total federal tax on this income if her Form 1099 from Tobler reported that $61,000 was an ordinary dividend and $27,400 was a qualified dividend distribution.
c. Compute Diane’s total federal tax on this income if her Form 1099 from Tobler reported that $45,500 was a qualified dividend distribution and $42,900 was a capital gain distribution.
Explanation / Answer
No knowledge
Paige also paid $295 for business publications other than those paid for by her employer and $325 for a local CPA to prepare her 2015 tax return.