Use the following to answer questions 24 and 25:Susan sells her antique desk that she has owned for 25 years for a $5,000 gain. Susan's marginal rate is 22%. Joy sells her stamp collection (basis $10,000) that she What tax rate will be applied to Joy's gain? a. 0% b. 22% c . 25% d. 28% e. 32%

Use the following to answer questions 24 and 25:Susan sells her antique desk that she has owned for 25 years for a $5,000 gain. Susan's marginal rate is 22%. Joy sells her stamp collection (basis $10,000) that she What tax rate will be applied to Joy's gain? a. 0% b. 22% c . 25% d. 28% e. 32%

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter14: Partnerships And Limited Liability Entities

Section: Chapter Questions

Problem 13P

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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.

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