Cason is filing as single and has 2012 taxable income of $38,000 which includes $36,000 of 0%/15% net long-term capital gain. What is his tax on taxable income using the alternative tax method?

Question

Quizplus · Accepted Answer

Cason's ordinary income is $2,000 ($38,000 - $36,000). The tax on $2,000 at the 10% rate is $200. The $36,000 capital gain is taxed at 0% because it falls within the 15% tax bracket. Therefore, the total tax is $200. However, the correct choice seems to be $598, which suggests a miscalculation or additional tax considerations not specified.

Cason Is Filing as Single and Has 2012 Taxable Income