Cason is filing as single and has 2014 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?

Question

Quizplus · Accepted Answer

Since Cason's taxable income does not take him out of the 15% bracket,all of the $34,000 net long­term capital gain is taxed at 0%.The total tax is $200 ($200 tax on $2,000 regular taxable income + $0 tax on $34,000 of long-term capital gain).

Cason Is Filing as Single and Has 2014 Taxable Income