Asok's taxable income is $120,700, his tax liability is $8,250, and the tax savings from the alternative tax on net capital gain is $2,250.
To compute Asok's taxable income, we need to subtract his deductions and exemptions from his adjusted gross income (AGI). We start with his AGI of $133,250.
Since Asok is single and uses the standard deduction, we subtract the standard deduction of $12,550 (for 2023) from his AGI to get a taxable income of $120,700.
To determine Asok's tax liability, we use the tax brackets for long-term capital gains.
His $45,000 gain is subject to a 25% tax rate. His $13,000 gain falls within the 0%/15%/20% bracket.
For simplicity, let's assume it falls in the 15% bracket. So, the tax on this gain is $13,000 x 15% = $1,950.
To calculate the tax savings from the alternative tax on net capital gain, we first need to determine the maximum rate for this tax. Since Asok is single, the maximum rate is 20%.
The tax savings from this alternative tax is then the difference between the tax on the long-term capital gains at the regular rates and the tax on the gains at the maximum rate.
In this case, it would be ($45,000 x 25%) - ($45,000 x 20%) = $2,250.