Lenore, a single California taxpayer, has taxable income before capital gains of $78,000 and a long-term capital gain of $5,000

Question

AVprozaik [17]

3 years ago

8

Lenore, a single California taxpayer, has taxable income before capital gains of $78,000 and a long-term capital gain of $5,000

on the sale of RSS stock. What is the total amount of California state tax Lenore will pay on the capital gain

Business

1 answer:

irina [24] · Answer 1 · 2022-07-27T23:25:39+03:00

Answer:

As we all know Long term capital gain is always taxed at 15% as per the federal taxation but in California the taxation is bit different the long term capital gain is not taxed separately it is included in the income and it is considered as Ordinary income and is taxed at regular individual tax rates. So, Tax that Lenore as to pay as per the Federal Taxation is 15% of $5,000 = $750. But Tax that Lenore gas to pay as per the California Taxation is 9.3% of $ 5,000 = $465, which is treated as a tax paid on ordinary income.