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In 2000, Ms. Ennis, a head of household, contributed $45,000 in exchange for 450 shares of Seta stock. Seta is a qualified small business. This year, Ms. Ennis sold all 450 shares for $117,000. Her only other investment income was an $8,300 long-term capital gain from the sale of land. Her taxable income before consideration of her two capital transactions is $599,000. Assume the taxable year is 2021. Use Individual tax rate schedules and Tax rates for capital gains and qualified dividends. Required: a. Compute Ms. Ennis's income tax and Medicare contribution tax for the year. b. How would the computation change if Ms. Ennis acquired the Seta stock in 2011 instead of 2000? c. How would the computation change if Ms. Ennis acquired the Seta stock in 2018 instead of 2000? Individual Tax Rate Schedules Married Filing Jointly and Surviving Spouse If taxable income is Not over $19.900 Over $19.900 but not over $81,050 Over $81,050 but not over S172,750 Over S172,750 but not over $329,850 Over $329,850 but not over $418,850 Over S418,850 but not over S628,300 Over $628,300 The tax is 10% of taxable income $1.990.00+12% of excess over $19.900 59.328.00 +22% of excess over $81,050 $29,502.00 +24% of excess over S172.750 S67,206,00 + 32% of excess over $329,850 595,686,00 - 35% of excess over $418,850 $168.993.50 +37% of excess over 5628,300 Married Filing Separately If taxable income is Not over $9.950 Over $9.950 but not over $40,525 Over $40,525 but not over $86,375 Over $86,375 but not over $164.925 Over $164.925 but not over $209,425 Over $209,425 but not over $314,150 Over $314,150 The taxis 10% of taxable income $995.00 +12% of excess over $9.950 $4.664.00 +22% of excess over $40.525 $14.751.00 +24% of excess over $86,375 $33,603.00 +32% of excess over $164.925 547.843.00 +35% of excess over $209,425 $84,496.75 +37% of excess over $314,150 Head of Household If taxable income is Not over $14,200 Over $14.200 but not over $54,200 Over $54,200 but not over $86,350 Over $86 350 but not over $164.900 Over $164.900 but not over $209,400 Over $209,400 but not over S523,600 Over S523,600 The tax is 10% of taxable income $1,420.00 +12% of excess over $14,200 56.220.00 - 22% of excess over $54,200 $13.293.00 +24% of excess over $86,350 $32.145.00+32% of excess over $164.900 $46.385.00+ 35% of excess over $209,400 S156,355.00 +37% of excess over $523,600 Single If taxable income is Not over $9.950 Over $9.950 but not over $40,525 Over $40,525 but not over $86,375 Over $86,375 but not over $164.925 Over $164.925 but not over $209,450 Over $209.450 but not over S523,600 Over S523,600 The taxis 10% of taxable income S995.00 +12% of excess over $9.950 $4,664,00 -22% of excess over $40.525 $14,751.00 +24% of excess over $86,375 $33,603.00 +32% of excess over $164.925 $47,843.00 +35% of excess over $209,425 $157,804 25+ 37% of excess over S523,600 Tax rates for capital gains and qualified dividends Rate 0% 15%** 20% Married Filing Jointly $0-$80.800 $80,801-S501,600 S501,601+ Married Filing Separately SO-S40,400 $40,401-$250.800 $250,801+ Single S0-540,400 $40,401-5445,850 $445.851+ Head of Household $0-$54,100 $54,101-$473,750 S473.751+ The highest income amount in this range for each filing status is referred to as maximum zero rate amount. The highest income amount in this range for each filing status is referred to as maximum 15-percent amount

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