Answer:
The increase in his tax liability is $1,120
Explanation:
STCL due to sale of stock = $8,000
LTCG due to sale of stock = $5,000
∴Net STCL = $8,000 - $5,000
Net STCL = $3,000
LTCG on sale of antique clock = $7,000
∴Net LTCG on sale of antique = $7,000 - $3,000 = $4,000
LTCG on sale of antiques is taxed at the rate of 28%
∴ Tax liability = $4,000 * 28%
Tax liability = $4,000 * 0.28
Tax liability = $1,120
