Cason is filing as single and has 2018 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? Note: Use the tax rate schedule rather than the tax table.
A) $0
B) $200
C) $300
D) $4,924
E) None of the above

Question

Quizplus · Accepted Answer

Cason's taxable income includes $34,000 of long-term capital gains, which are taxed at 0% up to $38,600 for a single filer in 2018. The remaining $2,000 of ordinary income is taxed at the 10% rate, resulting in $200 of tax.

Cason Is Filing as Single and Has 2018 Taxable Income