Question

Drew, whose taxable income is more than $418,400, has a tax rate of 39.6% on his ordinary income and $20,000 of net nonrecaptured Sec. 1231 losses at the start of the year. During the year, he recognizes a Sec. 1231 gain of $42,000 from the sale of land. (Click the icon to view the capital gains and dividends rates table.) Requirement: As a result of the sale, how much does Drew's tax liability increase? As a result of the sale, Drew's tax liability increases by $ Reference on gains and losses: - 28% rate on collectibles gains and includible Sec. 1202 gains - 20% rate on gains on assets held for more than one year and qualified dividends (for taxpayers whose regular tax bracket is 39.6%) - 15% rate on gains on assets held for more than one year and qualified dividends (for taxpayers whose regular tax bracket is higher than 15% and less than 39.6%) - 0% rate on gains on assets held for more than one year and qualified dividends (for taxpayers whose regular tax bracket is not higher than 15%) Note: The net investment income of higher income taxpayers (modified AGI greater than $200,000 for single and $250,000 for married filing jointly) may also be subject to an additional tax of 3.8%. Net investment income includes dividends and capital gains, along with other types of investment income. Enter any

          Drew, whose taxable income is more than $418,400, has a tax rate of 39.6% on his ordinary income and $20,000 of net nonrecaptured Sec. 1231 losses at the start of the year. During the year, he recognizes a Sec. 1231 gain of $42,000 from the sale of land. (Click the icon to view the capital gains and dividends rates table.)

Requirement: As a result of the sale, how much does Drew's tax liability increase?

As a result of the sale, Drew's tax liability increases by $

Reference on gains and losses:
- 28% rate on collectibles gains and includible Sec. 1202 gains
- 20% rate on gains on assets held for more than one year and qualified dividends (for taxpayers whose regular tax bracket is 39.6%)
- 15% rate on gains on assets held for more than one year and qualified dividends (for taxpayers whose regular tax bracket is higher than 15% and less than 39.6%)
- 0% rate on gains on assets held for more than one year and qualified dividends (for taxpayers whose regular tax bracket is not higher than 15%)

Note: The net investment income of higher income taxpayers (modified AGI greater than $200,000 for single and $250,000 for married filing jointly) may also be subject to an additional tax of 3.8%. Net investment income includes dividends and capital gains, along with other types of investment income.

Enter any

drew whose taxable income is more than 418400 has a tax rate of 396 on his ordinary income and s20000 of net nonrecaptured sec 1231 losses at the start of the year during the year he recogni 47792

Added by Paul G.

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