Perry is in the 33% tax bracket.During 2015,he had the following capital asset transactions: Gain from the sale of a stamp collection (held for 10 years) $30,000 Gain from the sale of an investment in land (held for 4 years) 10,000 Gain from the sale of stock investment (held for 8 months) 4,000 Perry's tax consequences from these gains are as follows:
A)(15% × $30,000) + (33% × $4,000).
B)(15% × $10,000) + (28% × $30,000) + (33% × $4,000).
C)(0% × $10,000) + (28% × $30,000) + (33% × $4,000).
D)(15% × $40,000) + (33% × $4,000).
E)None of these.

Question

Quizplus · Accepted Answer

The gains from the sale of the stamp collection and the investment in land meet the criteria for long-term capital gains and are taxed at a maximum rate of 15%. Therefore, Perry's tax liability from these transactions will be (15% x $30,000) + (15% x $10,000), which equals $6,750. 
The gain from the sale of the stock investment does not meet the criteria for long-term capital gains and will be taxed at Perry's ordinary income tax rate, which is 33%. Therefore, Perry's tax liability from this transaction will be (33% x $4,000), which equals $1,320. 
Adding the tax liability from these transactions together gives us a total of $8,070. The only answer choice that matches this amount is B.

Perry Is in the 33% Tax Bracket