Kirby is in the 15% tax bracket and had the following capital asset transactions during 2012: Kirby's tax consequences from these gains are as follows:

Question

Kirby is in the 15% tax bracket and had the following capital asset transactions during 2012:  Kirby's tax consequences from these gains are as follows:

Quizplus · Accepted Answer

According to the given information, Kirby is in the 15% tax bracket. For short-term capital gains (assets held for one year or less), the tax rate is based on the taxpayer's ordinary income tax bracket. Therefore, Kirby's tax consequences from gains will be (0% x $10,000) + (15% x $13,000) = $1,950. Option A is incorrect because it assumes that the gain of $10,000 is long-term, which is not given in the question. Option B is incorrect because it assumes that the gain of $11,000 is short-term, which is not given in the question. Option D is incorrect because it adds the gains together without considering the different tax rates applicable to each gain. Therefore, the correct answer is option C.

Kirby Is in the 15% Tax Bracket and Had the Following