Question

Matt and Meg Comer are married and file a joint tax return. They do not have any children. Matt works as a history professor at a local university and earns a salary of 68,200. Meg works part-time at the same university and earns44,800 a year. The couple does not itemize deductions. Other than salary, the Comers' only other source of income is from the disposition of various capital assets (mostly stocks). What is the Comers' tax liability for 2023 if they report the following capital gains and losses for the year?

Short-term capital gains: 9,900
Short-term capital losses: (2,900)
Long-term capital gains: 15,200
Long-term capital losses: (7,800)

Answer 1

The Comers' tax liability calculation for 2023 includes the sum of their net capital gains and salaries. After determining their total income, their tax rate based on the 2023 tax brackets will apply to find the final liability, which requires specific bracket information not provided here.

Step-by-step explanation:

To calculate the Comers' tax liability for 2023, we need to determine their net capital gains. Net short-term capital gains are calculated by subtracting short-term capital losses from short-term capital gains. For the Comers, this is $9,900 - $2,900 = $7,000. Similarly, net long-term capital gains are long-term capital gains minus long-term capital losses, which is $15,200 - $7,800 = $7,400.

The next step is to add these net capital gains to their combined salary to find their total income. Their combined salary is $68,200 (Matt) + $44,800 (Meg) = $113,000. Adding the net capital gains, their total income becomes $113,000 + $7,000 (net short-term capital gains) + $7,400 (net long-term capital gains) = $127,400.

Based on 2023 tax brackets (which are hypothetical in this situation, as real tax brackets can vary and should be looked up for accuracy), the Comers' marginal tax rate and whether they are eligible for a lower tax rate on long-term gains would determine their tax liability. Without the specific tax bracket information for 2023, we cannot provide an exact tax liability amount here.