Perry is in the 33% tax bracket.During 2012, he had the following capital asset transactions: Perry's tax consequences from these gains are as follows:

Question

Perry is in the 33% tax bracket.During 2012, he had the following capital asset transactions:  Perry's tax consequences from these gains are as follows:

Quizplus · Accepted Answer

Perry's short-term capital gain from the sale of stock is $30,000 and his long-term capital gain from the sale of land is $10,000. The short-term capital gain is taxed at his ordinary income tax rate of 33%. The long-term capital gain is taxed at a lower rate of 15% for the portion that falls within the 25% or higher tax bracket and 0% for the portion that falls within the 15% tax bracket or lower. Since Perry is in the 33% tax bracket, all of his long-term capital gain is taxed at the higher rate of 28%. Therefore, Perry's tax consequences are: (15% x $10,000) + (28% x $30,000) + (33% x $4,000) = $1,500 + $8,400 + $1,320 = $11,220.

Perry Is in the 33% Tax Bracket