Kirby, a Single Taxpayer, Has Taxable Income of $30,000 and Is

question 137

Multiple Choice

Kirby, a single taxpayer, has taxable income of $30,000 and is in the 12% tax bracket.During 2019, she had the following capital asset transactions: $\begin{array}{llcc} \text {Long-term gain from the sale of a coin collection } &\$11,000\\ \text { Long-term gain from the sale of a land investment } &10,000\\ \text { Short-term gain from the sale of a stock investment} &2,000\\\end{array}$
Kirby's tax consequences from these gains are as follows:

• A)(5% × $10,000) + (12% × $13,000).
• B)(12% × $13,000) + (28% × $11,000).
• C)(0% × $10,000) + (12% × $13,000).
• D)(12% × $23,000).
• E)None of these.

---

Definitions:

Gross Sales

The total sales revenue from goods or services before any deductions for returns or discounts.

Direct Expense

Expenses that can be directly attributed to the production of specific goods or services, such as materials and labor.

Sales Salaries

Compensation paid to employees directly involved in the sales function of a business, typically comprising both base salary and commissions.

Administrative Expense

Expenses related to the general operation of a business, including salaries of executive personnel, accounting and legal services, and insurance.