Corrine is filing as head of household and has 2020 taxable income of $35,000 which includes $23,000 of 5%/15% gain. What is the tax:on her taxable income using the alternative tax method?Select one:a. $3,918.b. $2.350.C. $4,200,d. $1,750.O O OO

Taxable income refers to the base income on which the tax is imposed and it involves all the income…

Corine is filing as head of household and has 2020 taxable income of $35,000 which includes $23.000 of 5%/159% gai on her taxable income using the alternative tax method? Select one a. $3,918. b. $2.350. CAD00

Corine is filing as head of household and has 2020 taxable income of $35,000 which includes $23.000 of 5%/159% gai on her taxable income using the alternative tax method? Select one a. $3,918. b. $2.350. CAD00

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter1: The Individual Income Tax Return

Section: Chapter Questions

Problem 7P

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Corrine is filing as head of household and has 2020 taxable income of $35,000 which includes $23,000 of 5%/15% gain. What is the tax:
on her taxable income using the alternative tax method?
Select one:
a. $3,918.
b. $2.350.
C. $4,200,
d. $1,750.
O O OO

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