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Sam and Alex are married and file jointly. Throughout the year, they received dividend income from two...

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Accounting

Sam and Alex are married and filejointly. Throughout the year, they received dividend income fromtwo stocks. Stock XYZ paid out a non-qualified dividend (based ontiming of ownership relative to the ex-dividend date) of $5,500.Stock ABC instead paid out $3,800 as a qualified dividend. Thecouple’s only other income during the year was $200,000 in salariesin total. But, they are not considered high income taxpayers.(Assume the tax year is 2020).

a. What was the additional tax Sam andAlex had to pay because of the dividend income from StockXYZ?

b. What was the additional tax Sameand Alex had to pay because of the dividend income from StockABC?

Answer & Explanation Solved by verified expert
4.4 Ratings (611 Votes)
a Non qualified dividends are taxed as ordinary income according to federal income tax brackets For married couple and filing jointly applicable bracket is 171051    See Answer
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