Cason is filing as single and has 2016 taxable income of $36,000 which includes $34,000 of 0%/15%/20% net long-term capital gain.What is his tax on taxable income using the alternative tax method? Note: Use the tax rate schedule rather than the tax table.

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Cason's taxable income includes $34,000 of long-term capital gains, which are taxed at 0% up to the threshold for the 15% rate. For 2016, the 0% rate applies to single filers with taxable income up to $37,650. Therefore, the entire $34,000 of capital gains is taxed at 0%, and only the remaining $2,000 of ordinary income is taxed at the 10% rate, resulting in $200 of tax.

Cason Is Filing as Single and Has 2016 Taxable Income