Sara Is Filing as Head of Household and Has 2012

question 86

Multiple Choice

Sara is filing as head of household and has 2012 taxable income of $27,000 which includes $13,000 of net long-tem capital gain. The net long-term capital gain is made up of $10,000 25% gain and $3,000 0%/15% gain. What is the tax on her taxable income using the alternative tax method?

• A)$0.
• B)$4,050.
• C)$2,980.
• D)$3,615.
• E)None of the above.

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Definitions:

Discounted

A reduction applied to a price or rate, lowering the original amount.

Simple Interest Rate

The percentage of the principal amount that is paid as interest for a specified period.

Contract

A contract that is recognized and can be enforced by law, formed between two or more participants.

Simple Interest

Simple Interest is a calculation of interest that does not take into account the effect of compounding. It is typically calculated by multiplying the daily interest rate by the principal amount and the number of days that elapse between payments.