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    Federal Income Tax for Investors

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    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

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    Solution Preview

    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
    STCL=2000; ...

    Solution Summary

    The expert examines federal income tax for investors.