Capital gains. Nanouk files as head-of-household. In 2023, she earned a salary of $116,150. She also realized a gain of $40,000 on the sale of a capital asset that she had held for eight years. She had no other income or transactions. She had no “for AGI” deductions and took the standard deduction ($20,800). How much is her income tax liability for 2023? Capital gains. Nanouk files as head-of-household. In 2023, she earned a salary of $116,150. She also realized a gain of $40,000 on the sale of a capital asset that she had held for eight years. She had no other income or transactions. She had no “for AGI” deductions and took the standard deduction ($20,800). How much is her income tax liability for 2023? $20,678 $24,278 $14,678 $22,678

To calculate Nanouk's income tax liability for 2023, we need to consider both her ordinary income tax and her capital gains tax. First, we calculate her taxable income: $116,150 (salary) + $40,000 (long-term capital gain) = $156,150 (total income) $156,150 (total income) - $20,800 (standard deduction) = $135,350 (taxable income) Next, we determine her long-term capital gains tax rate. For 2023, the long-term capital gains tax rates for a head-of-household filer are 0% for income up to $55,800, 15% for income between $55,801 and $488,500, and 20% for income above $488,500. Nanouk's ordinary income after the standard deduction is $95,350 ($116,150 - $20,800), which is below the threshold for the 15% capital gains tax rate. Therefore, her $40,000 capital gain will be taxed at 15%. Now, we calculate her ordinary income tax and capital gains tax: Ordinary income tax: This would be calculated based on the tax brackets for a head-of-household filer in 2023, which would require using the IRS tax tables or tax software, as it involves multiple tax brackets. Capital gains tax: 15% of $40,000 = $6,000 Without the

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