Kirby, a single taxpayer, has taxable income of $30,000 and is in the 12% tax bracket. During 2019, she had the following capital asset transactions: $\begin{array}{lr}
\text { Long-term gain from the sale of a coin collection } & \$ 11,000 \
\text { Long-term gain from the sale of a land investment } & 10,000 \
\text { Short-term gain from the sale of a stock investment } & 2,000
\end{array}$ Kirby's tax consequences from these gains are as follows:
A) (5% × $10,000) + (12% × $13,000).
B) (12% × $13,000) + (28% × $11,000).
C) (0% × $10,000) + (12% × $13,000).
D) (12% × $23,000).
E) None of these.

Question

Quizplus · Accepted Answer

The long-term gain from the sale of the land investment is eligible for the 0% capital gains rate because Kirby's taxable income is in the 12% tax bracket. The long-term gain from the sale of the coin collection and the short-term gain from the sale of the stock investment are taxed at the 12% rate.

Kirby, a Single Taxpayer, Has Taxable Income of $30,000 and Is