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Mr$.$ and Mrs$.$ Howell, owned the following investment assets:

Investment Assets Date Acquired Purchase Price Broker's Commission Paid at Time of Purchase

$300$ shares of IBM common $($NYSE: IBM$)11/22/2021$ $ $10,480$ $ $100$

$200$ shares of IBM common $($NYSE: IBM$)4/3/202243,380300$

$3,000$ shares of Apple preferred $($NASDAQ: AAPL$)12/12/2022160,0001,300$

$2,100$ shares of Cisco common $($NASDAQ: CSCO$)8/14/202353,800550$

$420$ shares of Vanguard mutual fund $3/2/202416,000$ No$-$load fund$*$FNo commissions are charged when no$-$load mutual funds are bought and sold.

Because of the downturn in the stock market, Mr$.$ and Mrs$.$ Howell decided to sell most of their stocks and the mutual fund in $2024$ and to reinvest in municipal bonds. The following investment assets were sold in $2024$:

Investment Assets Date Sold Sale Price Broker's Commission Paid at Time of Sale

$300$ shares of IBM common $5/6$ $ $15,000$ $ $100$

$3,000$ shares of Apple preferred $10/5222,7002,000$

$2,100$ shares of Cisco common $8/1563,380650$

$451$ shares of Vanguard mutual fund $12/2117,000$ No$-$load fund$*$Footnote asterisk

$*$Footnote asteriskNo commissions are charged when no$-$load mutual funds are bought and sold.

The Howells' broker issued them a Form $1099-$B showing the sales proceeds net of the commissions paid. For example, the IBM sales proceeds were reported as $$14,900$ on the Form $1099-$B they received.

In addition to the sales reflected in the table above, the Howells provided you with the following additional information concerning $2024$:

The Howells received a consolidated Form $1099$ from the Vanguard mutual fund reporting a $$900$ long$-$term capital gain distribution. This dividend was reinvested in $31$ additional Vanguard mutual fund shares on $6/30/2024.$

In $2018,$ Mrs$.$ Howell loaned $$7,300$ to a friend who was starting a new multilevel marketing company called LD$3.$ The friend declared bankruptcy in $2024,$ and Mrs$.$ Howell has been notified she will not be receiving any repayment of the loan.

The Howells have a $$3,600$ short$-$term capital loss carryover and a $$6,100$ long$-$term capital loss carryover from prior years.

The Howells did not instruct their broker to sell any particular lot of IBM stock.

The Howells earned $$3,650$ in municipal bond interest, $$3,650$ in interest from corporate bonds, and $$5,300$ in qualified dividends.

Assume the Howells have $$162,500$ of wage income during the year.During $2024,$ your clionts, Mr$.$ and Mrs$.$ Howell, ownod the following inwestment assots:

$*$No commissions are charged when no$-$load mutual funds are bought and sold.

Because of the downtum in the stock market. Mr$.3$nd Mrs$.$ Howell decided to gell most of their stocks and the mutual fund

in $2024$ and to reirvest in murlcipal bonds. The following Irwestment assets were sold in $2024$ :

$*$No commisslons are charged whon no$-$load mutual funds are bought and sold.

The Howalls" broker issuod them a Form $1099-8$ showing the sales proceocls net of the commissions pald. For oxample,

the IBM sales proceeds were reported as $$14,900$ on the Form $099-$B they recelved.

In addition to the sales reflected in the table above, the Howells provided you with the following additional infiomation

concerring $2024$:

The Howols recolvod a consolidatod Form $1099$ from the Vanguard mutual fund roporting a $$900$ long$-$torm capital

gain distribution. This dividend was relnvested in $37$ additional Vanguard mutual fund shares on $6/30/2024.$

In $2018.$ Mrs$.$ Howell loaned $$7,300$ to a frend who was starting a new multievel marketing company called LD$3.$ The

frlend declared bankruptcy in $2024,$ and Mrs$.$ Howell has been notfied she will not be receling any repayment of the

losn.

The Howols have a $$3,600$ short$-$term capital loss carryower and a $$6,100$ long$-$term capital loss carryover from prior

years.

The Howels did not ingtruct ther broker to sel any particular lot of IBM stock.

The Howels earned $$3,650$ in munlcloal bond linterest, $$3,660$ in Interest from corporate bonds, and $$5,300$ in

qualified dividends.

Assume the Howells have $$162,500$ of wage inco:me during the year.

Questions to answer using tax forms:

A$.$ Use Form $8949$ and page $1$ of Schedule D to compute net long$-$term and short$-$term capital gains. Then, compute the Howells' tax liability for the year $($ignoring the alternative minimum tax and any phase$-$out provisions$)$ assuming they file a joint return, they have no dependents, they don't make any special tax elections, and their itemized deductions total $$30,000.$ Assume that asset bases are reported to the IRS. $($Use the tax rate schedules, Dividends and Capital$)$

B$.$ Compute Howell's tax liablity

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