Cason is filing as single and has 2011 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

The tax on the $36,000 net long-term capital gain is 0% because it falls within the 0% capital gains tax bracket for 2011. The remaining $2,000 of ordinary income is taxed at the 10% rate, resulting in a tax of $200. However, the correct choice is $725, which suggests there might be an additional calculation or consideration not detailed in the question.

Cason Is Filing as Single and Has 2011 Taxable Income