Tax liability as a result of the sales


Question: Trisha, whose tax rate is 35%, sells the following capital assets in 2007 with gains and losses as shown:

Asset    Gain or (loss)    Holding Period
A       $15,000    15 months
B          7,000    20 months
C        (3,000)    14 months

Q1. Determine Trisha's increase in tax liability as a result of the three sales. All assets are stock held for investment. Ignore the effect of increasing AGI on deductions and phase-out amounts.

Q2. Determine her increase in tax liability if the holding period for asset B is 8 months.

Q3. Determine her increase in tax liability if the holding periods are the same as inPart a but asset B is an antique clock.

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Accounting Basics: Tax liability as a result of the sales
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