In 2021, Tom and Amanda Jackson (married filing jointly) have $300,000 of taxable income before considering the following events: (Use the dividends and capital gains tax rates and tax rate schedules.) a. On May 12, 2021, they sold a painting (art) for $122,500 that was inherited from Grandma on July 23, 2019. The fair market value on the date of Grandma's death was $96,250 and Grandma's adjusted basis of the painting was $27,500. b. They applied a long-term capital loss carryover from 2020 of $11,250. c. They recognized a $12,625 loss on the 11/1/2021 sale of bonds (acquired on 5/12/2011). d. They recognized a $4,390 gain on the 12/12/2021 sale of IBM stock (acquired on 2/5/2021). e. They recognized a $20,000 gain on the 10/17/2021 sale of rental property (the only $1231 transaction), of which $10,000 is reportable as gain subject to the 25 percent maximum rate and the remaining $10,000 is subject to the 0/15/20 percent maximum rates (the property was acquired on 8/2/2015). They recognized a $13,250 loss on the 12/20/2021 sale of bonds (acquired on 1/18/2021). 9. They recognized a $7,625 gain on the 6/27/2021 sale of BH stock (acquired on 7/30/2012). h. They recognized an $12,250 loss on the 6/13/2021 sale of QuikCo stock (acquired on 3/20/2014). 1. They received $1,000 of qualified dividends on 7/15/2021. After completing the required capital gains netting procedures, what will be the Jacksons' 2021 tax liability? Total tax liability
In 2021, Tom and Amanda Jackson (married filing jointly) have $300,000 of taxable income before considering the following events: (Use the dividends and capital gains tax rates and tax rate schedules.) a. On May 12, 2021, they sold a painting (art) for $122,500 that was inherited from Grandma on July 23, 2019. The fair market value on the date of Grandma's death was $96,250 and Grandma's adjusted basis of the painting was $27,500. b. They applied a long-term capital loss carryover from 2020 of $11,250. c. They recognized a $12,625 loss on the 11/1/2021 sale of bonds (acquired on 5/12/2011). d. They recognized a $4,390 gain on the 12/12/2021 sale of IBM stock (acquired on 2/5/2021). e. They recognized a $20,000 gain on the 10/17/2021 sale of rental property (the only $1231 transaction), of which $10,000 is reportable as gain subject to the 25 percent maximum rate and the remaining $10,000 is subject to the 0/15/20 percent maximum rates (the property was acquired on 8/2/2015). They recognized a $13,250 loss on the 12/20/2021 sale of bonds (acquired on 1/18/2021). 9. They recognized a $7,625 gain on the 6/27/2021 sale of BH stock (acquired on 7/30/2012). h. They recognized an $12,250 loss on the 6/13/2021 sale of QuikCo stock (acquired on 3/20/2014). 1. They received $1,000 of qualified dividends on 7/15/2021. After completing the required capital gains netting procedures, what will be the Jacksons' 2021 tax liability? Total tax liability
Chapter17: Property Transactions: §1231 And Recapture Provisions
Section: Chapter Questions
Problem 51P
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Transcribed Image Text:In 2021, Tom and Amanda Jackson (married filing jointly) have $300,000 of taxable income before considering the following events:
(Use the dividends and capital gains tax rates and tax rate schedules.)
a. On May 12, 2021, they sold a painting (art) for $122,500 that was inherited from Grandma on July 23, 2019. The fair market value on
the date of Grandma's death was $96,250 and Grandma's adjusted basis of the painting was $27,500.
b. They applied a long-term capital loss carryover from 2020 of $11,250.
c. They recognized a $12,625 loss on the 11/1/2021 sale of bonds (acquired on 5/12/2011).
d. They recognized a $4,10 gain on the 12/12/2021 sale of IBM stock (acquired on 2/5/2021).
e. They recognized a $20,000 gain on the 10/17/2021 sale of rental property (the only $1231 transaction), of which $10,000 is reportable
as gain subject to the 25 percent maximum rate and the remaining $10,000 is subject to the 0/15/20 percent maximum rates (the
property was acquired on 8/2/2015).
They recognized a $13,250 loss on the 12/20/2021 sale of bonds (acquired on 1/18/2021).
9. They recognized a $7,625 gain on the 6/27/2021 sale of BH stock (acquired on 7/30/2012).
h. They recognized an $12,250 loss on the 6/13/2021 sale of QuikCo stock (acquired on 3/20/2014).
i. They received $1,000 of qualified dividends on 7/15/2021.
After completing the required capital gains netting procedures, what will be the Jacksons' 2021 tax liability?
Total tax liability
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