Question 1

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Matt and Meg Comer are married and file a joint tax return. They do not have any children. Matt works as a history professor at a local university and earns a salary of $70,000. Meg works part time at the same university. She earns $43,000 a year. The couple does not itemize deductions. Other than salary, the Comers' only other source of income is from the disposition of various capital assets (mostly stocks). (Use the tax rate schedules, Dividends and Capital Gains Tax Rates.)

b. What is the Comers' tax liability for 2023 if they report the following capital gains and losses for the year?

Short-term capital gains	$ 1,500
Short-term capital losses	0
Long-term capital gains	13,000
Long-term capital losses	(10,000)

Note: Round your final answer to two decimal places.

standerd deduction 27,700

Schedule Y-1-Married Filing Jointly or Qualifying surviving spouse

If taxable income is over:	But not over:	The tax is:
$ 0	$ 22,000	10% of taxable income
$ 22,000	$ 89,450	$2,200 plus 12% of the excess over $22,000
$ 89,450	$ 190,750	$10,294 plus 22% of the excess over $89,450
$ 190,750	$ 364,200	$32,580 plus 24% of the excess over $190,750
$ 364,200	$ 462,500	$74,208 plus 32% of the excess over $364,200
$ 462,500	$ 693,750	$105,664 plus 35% of the excess over $462,500
$ 693,750		$186,601.5 plus 37% of the excess over $693,750

Tax Rates for Net Capital Gains and Qualified Dividends

Rate*	Taxable Income
Married Filing Jointly	Married Filing Separately	Single	Head of Household	Trusts and Estates
0%	$0 - $89,250	$0 - $44,625	$0 - $44,625	$0 - $59,750	$0 - $3,000
15%	$89,251 - $553,850	$44,626 - $276,900	$44,626 - $492,300	$59,751 - $523,050	$3,001 - $14,650
20%	$553,851+	$276,901+	$492,301+	$523,051+	$523,051+

*This rate applies to the net capital gains and qualified dividends that fall within the range of taxable income specified in the table (net capital gains and qualified dividends are included in taxable income last for t

Question 2

Dana intends to invest $30,000 in either a Treasury bond or a corporate bond. The Treasury bond yields 5 percent before tax, and the corporate bond yields 6 percent before tax. Assume Dana's federal marginal rate is 24 percent and she itemizes deductions.

Required:

a-1. Assuming Dana's marginal state rate is 5 percent, which of the two options should she choose?

a-2. How much interest after-tax would Dana earn by investing in the corporate bond?

b-1. If she were to move to another state where her marginal state rate would be 10 percent, which of the two options should she choose?

b-2. How much interest after-tax would Dana earn by investing in the corporate bond as per requirement b-1?