Required information $2023$ Tax Rate Schedules

Individuals

Schedule X$-$Single

Schedule Y$-1-$Married Filing Jointly or Qualifying surviving spouse Tax Rates for Net Capital Gains and Qualified Dividends

$*$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 this purpose$).$

$[$The following information applies to the questions displayed below.$]$

During $2023,$ your clients, Mr$.$ and Mrs$.$ Howell, owned the following investment assets:

$"$No 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 $2023$ and to reinvest in municipal bonds. The following investment assets were sold in $2023$:

$"$No 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 $$14,300$ 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 $2023$:

The Howells received a Form $1099-$B from the Vanguard mutual fund reporting a $$900$ long$-$term capital gain

distribution. This distribution was reinvested in $31$ additional Vanguard mutual fund shares on $6/30/2023.$

In $2017,$ Mrs$.$ Howell loaned $$6,700$ to a friend who was starting a new multilevel marketing company called LD$3.$ The

friend declared bankruptcy in $2023,$ and Mrs$.$ Howell has been notified she will not be receiving any repayment of the

loan.

The Howells have a $$3,000$ short$-$term capital loss carryover and a $$5,500$ 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 $$3,350$ in municipal bond interest, $$3,350$ in interest from corporate bonds, and $$4,700$ in qualified

dividends.

Assume the Howells have $$147,500$ of wage income during the year.

a$-3.$ 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.$

$($Use the tax rate schedules. Dividends and Capital Gains Tax Rates.$)$

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