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How did they get 9086 and 78950 under a)? Where are those 2 numbers coming from?

Mr. and Mrs. Poe earned $115,900 compensation income and $963 interest this year and recognized a $600 short-term capital gain and a $7,200 long-term capital gain on the sale of securities. They incurred $4,400 investment interest expense and $25,500 other itemized deductions. Use Individual tax rate schedules and Tax rates for capital gains and qualified dividends. 1. Compute the Poe's income tax on a joint return if they don't elect to treat long-term capital gain as investment income. 2. Compute the Poe's income tax if they elect to treat enough long-term capital gain as investment income to allow them to deduct their investment interest. Expert Answer Performer answered this 16,396 answers Was this answer helpful? 14 Do Let me know in case you face any issue: Answers are highlighted in yellow: Tax year is not given, Tax year 2019 rates have been used: Solution: a) 115900 963 600 7200 124663 Don't elect to treat long-term capital gain as investment income: Earned Income Interest Income Short-term capital gain Long-term capital gain Gross income and AGI Less: Itemized deduction: Investment interest expense (Upto - 963+600 = 1563) Other itemized deductions Taxable income Regular income (97600-7200) Income tax [(9086)+(90400-78950)*22%] + (7200*15%) a) -1563 -25500 $ 97,600 $ 90,400 $ 12,685 b) Elect to treat long-term capital gain as investment income: Earned Income Interest Income Short-term capital gain Long-term capital gain Gross income and AGI Less: Itemized deduction: Investment interest expense Other itemized deductions Taxable income Income tax (9086)+(94763-78950)*22% 115900 963 600 7200 124663 -4400 -25500 $ 94,763 $ 12,565 b)

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