Perry is in the 33% tax bracket. During 2016, he had the following capital asset transactions:
Perry's tax consequences from these gains are as follows:

Question

Quizplus · Accepted Answer

Perry's short-term gains are taxed at his regular income tax rate of 33%. His long-term gains are taxed at the lower long-term capital gains rate of 15%. Therefore, the tax consequences are calculated as follows:
Short-term gain: 33% x $4,000 = $1,320
Long-term gain: 15% x $30,000 = $4,500
Total tax consequences: $1,320 + $4,500 = $5,820
Choice B is the only one containing both the calculations for the long-term and short-term gains.

Perry Is in the 33% Tax Bracket