Sara is filing as head of household and has 2018 taxable income of $57,000 which includes $3,000 of net long-tem capital gain. The net long-term capital gain is made up of $1,000 25% gain and $2,000 0%/15%/20% gain. What is the tax on her taxable income using the alternative tax method? Note: Use the tax rate schedule rather than the tax table.

Question

Quizplus · Accepted Answer

The alternative tax for net capital gain is $2,000 x 20% = $400. The regular tax on the remaining $54,000 of taxable income is $7,088. The total tax is $400 + $7,088 = $7,488.

Sara Is Filing as Head of Household and Has 2018