Jamie is single. In 2020, she reported $100,000 of taxable income, including a long-term capital gain of $5,000. What is her gross tax liability? (Round your answer to the nearest whole dollar amount.)(Use the tax rate schedules, long-term capital gains tax brackets.)

Question

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First, we need to determine Jamie's regular tax liability. Using the tax rate schedules for 2020, we can see that her tax liability for $100,000 of taxable income is $18,080.

Next, we need to calculate the tax on her long-term capital gain. Since the gain is $5,000 and she is single, we can look at the long-term capital gains tax brackets for 2020. The first $40,000 of long-term capital gains for a single filer is taxed at 0%, and the next $441,450 is taxed at 15%. Since $5,000 is within the 0% tax bracket, she does not owe any tax on her long-term capital gain.

Therefore, her gross tax liability is $18,080. The answer closest to this value is C, $17,630, which is the correct answer when rounded to the nearest whole dollar.

Jamie Is Single