Perry is in the 33% tax bracket.During 2013,he had the following capital asset transactions: Perry's tax consequences from these gains are as follows:

Question

Perry is in the 33% tax bracket.During 2013,he had the following capital asset transactions:  Perry's tax consequences from these gains are as follows:

Quizplus · Accepted Answer

Perry had a long-term capital gain of $30,000 and a short-term capital gain of $4,000. Long-term capital gains are taxed at a maximum rate of 15% for taxpayers in the 33% bracket. Therefore, Perry's tax on the long-term gain is (15% x $30,000) = $4,500. Short-term gains are taxed at the ordinary income tax rate, which for Perry is 33%. Therefore, Perry's tax on the short-term gain is (33% x $4,000) = $1,320. Adding these together gives a total tax of $5,820, which is only represented in option B.

Perry Is in the 33% Tax Bracket