Share
Explore BrainMass

Federal Income Tax for Investors

What is the federal income tax owed by an investor in the 35 percent income tax bracket (15 percent tax rate on long-term capital gains and dividend income)?

a. Megan sold stock A for a short-term capital gain of $5,500; sold stock B for a short-term capital loss of $2,100

b. Margaret sold stock A for a short-term capital loss of $2,000; sold stock B for a short-term capital gain of $4,000

c. Melissa is 70 years old and withdraws $1,000 from her Roth IRA account Would the answer be different is she were 65 years old?

d. Morgan bought 100 shares of IBM in March for $100 a share and sold the shares in April for $110.

e. Murphy contributed $4,000 to an IRA and used the proceeds to purchase sotck A for $4000. Teh stock was subsequently sold for $4,500 after year had passed. hide problem

Solution Preview

a.
STCG=5500; STCL=2100
First net the STCG and STCL to reach NSTCG of 3400.
NSTCG is taxed at investor's regular income tax bracket of 35%, so federal income tax=3400*35%=1190
b.
STCL=2000; ...

Solution Summary

The expert examines federal income tax for investors.

$2.19