Martha Is Single with One Dependent and Files as Head

question 143

Essay

Martha is single with one dependent and files as head of household. She had 2012 taxable income of $45,000 which included $16,000 of 0%/15% net long-term capital gain. What is her tax on taxable income using the alternative tax on net long-term capital gain method?

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Definitions:

Insignificant Influence

A situation in which an investor does not have the power to govern the financial and operating policies of an investee.

Stock Investment

Purchasing shares of a company's stock to potentially earn dividends or sell at a higher price for profit, considered a form of investing.

Fair Value

An estimated market value of an asset or liability, based on current conditions and willing buyer and seller scenarios.

Insignificant Influence

Refers to a situation where an investor does not have the power to govern the financial and operating policies of an investee, typically resulting in the investment being accounted for using the cost method or fair value method.