Answer:
Explanation:
Given that:
Matt and Meg Comer are married, file a joint tax return and do not have any children.
The total salary of Matt and Meg = $64,700 + $34,000 = $98,700
The net short capital gain = Short-term capital gains - Short-term capital losses
The net short capital gain = $9,200 - $2,200 = $7,000
The net Long term capital gains = Long-term capital gains - Long-term capital losses
The net Long term capital gains = $15,390 - $6,390 = $9000
The Adjusted gross income AGI = Total Salary + net short capital gain + net Long term capital gains
The Adjusted gross income AGI = $98,700 + $7,000 + $9000
The Adjusted gross income AGI = $114700
The Taxable income = Adjusted gross income AGI - Standard deduction
The Taxable income = $114700 - $24,400
The Taxable income = $90,300
The net taxable income = Taxable income - less preferentially taxed income
The net taxable income = $90,300 - $9000
The net taxable income = $81,300
For 2019:
Tax Liability = $9086 + ($81,300 - $78,950) × 22%
Tax Liability = $9086 + ($2,350) × 0.22
Tax Liability = $9086 + $517
Tax Liability = $9,603
The long-term capital gain for 2019 = $9,000 × 15% (since it is between 15% - 37% ordinary income tax range, it may be taxed as 15%)
The long-term capital gain for 2019 = $9,000 × 0.15
The long-term capital gain for 2019 = $1350
Therefore; the Comers’ tax liability for 2019 if they report the following capital gains and losses for the year is:
Tax Liability + The long-term capital gain for 2019
= $9,603 + $1350
= $10953
b.
The total salary of Matt and Meg = $64,700 + $34,000 = $98,700
The net short capital gain = Short-term capital gains - Short-term capital losses
The net short capital gain = $1,500 - $0 = $1,500
The net Long term capital gains = Long-term capital gains - Long-term capital losses
The net Long term capital gains = $10,500 - $10,200 = $300
The Adjusted gross income AGI = Total Salary + net short capital gain + net Long term capital gains
The Adjusted gross income AGI = $98,700 + $1,500 + $300
The Adjusted gross income AGI = $100,500
The Taxable income = Adjusted gross income AGI - Standard deduction
The Taxable income = $100500 - $24,400
The Taxable income = $76,100
The net taxable income = Taxable income - less preferentially taxed income
The net taxable income = $76,100 - $300
The net taxable income = $75,800
For 2019:
Tax Liability = $1940 + ($75,800 - $19,400) × 12%
Tax Liability = $1940 + ($56400) × 0.12
Tax Liability = $1940 + $6768
Tax Liability = $8,708
The long-term capital gain for 2019 = $3,190 × 0% (since it is in 10% - 15% ordinary income tax range)
The long-term capital gain for 2019 = $0
Therefore; the Comers’ tax liability for 2019 if they report the following capital gains and losses for the year is:
Tax Liability + The long-term capital gain for 2019
= $8,708 + $0
= $8708
