Assume that Joe (single) has a marginal tax rate of 37 percent and decides to make the election to include preferentially-taxed capital gains and qualified dividends as investment income. What rate must Joe use when calculating the tax on these two items?

Question

Assume that Joe (single) has a marginal tax rate of 37 percent and decides to make the election to include preferentially-taxed capital gains and qualified dividends as investment income. What rate must Joe use when calculating the tax on these two items?

Quizplus · Accepted Answer

Joe must use his marginal tax rate of 37% when calculating the tax on capital gains and qualified dividends if he elects to include them as investment income.

Assume That Joe (Single) Has a Marginal Tax Rate of 37