Mary has taxable income of $40,000, with short-term capital gains of $2,500. What will be her capital gains tax rate and tax owed? Single Taxpayers: Income Brackets Tax Rate Income Bracket 10% 0 to 9,525 12% 9,526 to 38,700 22% 38,701 to 82,500 24% 82,501 to 157,500 32% 157,501 to 200,000 35% 200,001 to 500,000 37% > 500,000 Single Taxpayers: Qualified Dividends and Long-Term Capital Gains Tax Rate Income Bracket 0% 0 to 38,600 15% 38,601 to 425,800 20% > 425,800 A. 0% tax rate with no taxes owed B. 15% tax rate with $375 in taxes owed C. 22% tax rate with $550 in taxes owed D. 24% tax rate with $600 in taxes owe

Question

America Rasmussen

Mathematics

16 August, 22:33

Mary has taxable income of $40,000, with short-term capital gains of $2,500. What will be her capital gains tax rate and tax owed? Single Taxpayers: Income Brackets Tax Rate Income Bracket 10% 0 to 9,525 12% 9,526 to 38,700 22% 38,701 to 82,500 24% 82,501 to 157,500 32% 157,501 to 200,000 35% 200,001 to 500,000 37% > 500,000 Single Taxpayers: Qualified Dividends and Long-Term Capital Gains Tax Rate Income Bracket 0% 0 to 38,600 15% 38,601 to 425,800 20% > 425,800 A. 0% tax rate with no taxes owed B. 15% tax rate with $375 in taxes owed C. 22% tax rate with $550 in taxes owed D. 24% tax rate with $600 in taxes owe

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Erin · Answer 1

The correct option is B, 15% tax rate with $375 in taxes owed

Step-by-step explanation:

Mary has a taxable income of $40,000 which implies that Mary falls into tax bracket of capital gains tax of 15% for taxable income between $38,601 and $425,800.

The amount capital gains tax payable is however the capital gains itself multiplied by the percentage applicable of 15% not the entire taxable income since that consisted of other income from other sources aside from capital gains

capital gains tax=$2500*15%=$375