Ian and Mia Married in Early 2018 and Purchased a New
Ian and Mia married in early 2018 and purchased a new home together. Each owned and lived in separate residences prior to the marriage. Ian purchased his residence 5 years ago for $190,000 and he added a master bedroom and bathroom addition at a cost of $40,000. Mia purchased her home three years ago for $135,000. In late 2018, Ian sold his residence for $510,000 and paid a sales commission of $8,000. After paying off his $80,000 mortgage balance, he received the remaining cash proceeds of $422,000. In late 2018 Mia sold her residence for $190,000 and paid a sales commission of $2,000. She had paid off her mortgage so she received $188,000 cash from the sale. If Ian and Mia file a joint tax return for 2018, how much gain do they recognize on their 2018 joint tax return from the sales of their previous homes?
Abby has a $10,000 loss on some collectibles, a $5,000 Sec. 1202 gain, and an $11,000 gain on some securities. If all gains and losses are long-term and Abby is in the 24 percent tax bracket, how is her net gain taxed?
A) $5,000 at 25%; $1,000 at 15%
B) $6,000 at 15%
C) $5,000 at 28%; $1,000 at 15%
D) $6,000 at 28%
Kelly, a single individual, has $15,000 of taxable income before a long-term capital gain of $5,000 on the sale of some stock owned for two years that she sold in 2018. What is the tax rate applied to this gain?
A) 0 percent
B) 10 percent
C) 15 percent
D) 20 percent
Wally (who is in the 24 percent tax bracket) has a $5,000 short-term capital loss on some bonds, a $6,000 long-term capital loss on collectibles, a $15,000 Section 1202 gain, and a net $4,000 long-term capital gain from an investment. What is amount and type of gain(s) and tax rate(s) applied?
A) $8,000 gain at 28%
B) $8,000 long-term capital gain at 15%
C) $4,000 gain at 28%; $4,000 long-term capital gain at 15%
D) $4,000 gain at 24%; $4,000 long-term capital gain at 15%