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In 2019, Jeff and Kim Jenson (married filing a joint return) have $300,000 of taxable income before considering the following transactions:

1.On March 2, 2019, they sold a painting (art) for $100,000 that was inherited from Grandma on January 23, 2019. The FMV on the date of Grandma's death was $90,000 and Grandma's adjusted basis in the painting was $25,000;

2. A $12,000 loss on 11/1/19 sale of bonds (acquired on 5/12/11);

3. A $4,000 gain on 12/12/19 sale of IBM stock (acquired on 2/5/19);

4. A $20,000 gain on the 10/17/19 sale of rental property. Of the $20,000 gain, $11,000 is reportable as gain subject to the 25% maximum rate and the remaining $9,000 is subject to the 15% maximum rate (the property was acquired on 8/2/14);

5. A $12,000 loss on 12/20/19 sale of bonds (acquired on 1/18/19);

6. A $7,000 gain on 8/27/19 sale of BH stock (acquired on 7/30/14); and

7. A $11,000 loss on 6/13/19 sale of QuikCo. Stock (acquired on 3/20/16).

A. Calculate the Jensen's total short-term capital gain or loss from these transactions (before combining any columns in the netting process).

a. $4,000

b. ($8,000)

c. $14,000

d. $2,000

B. Calculate the Jensen's total 28% gain from these transactions (before combining any columns in the netting process).

a. $0

b. $10,000

c. $75,000

d. $100,000

C. Assume the transactions above result in the following gains and losses in the capital gain/loss netting process. Calculate the tax liability on the net gain from these transactions.

Short-term Capital Gains/Losses	28% Gain	25% Gain	Long-term Capital Gains/Losses
8,000	15,000	12,000	(12,000)
(20,000)	-	-	6,000
-	-	-	10,000
-	-	-	(11,000)

a. $1,200

b. $2,000

c. $2,240

d. $2,560

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