Reference no: EM13495141

Sally has taxable income of $160,000 as of November 30 of this year. She wants to sell a Rodin sculpture that has appreciated $90,000 since she purchased it six years ago, but she does not want to pay more than $15,000 of additional tax on the transaction. Sally also owns various stocks, some of which are currently worth less than their basis.

a. How will the gain on sale of the Rodin sculpture be taxed?

Select As a long-term gain eligible for a special 0% tax rateAs a long-term gain eligible for a special 15% tax rate As a long-term gain subject to a 28% tax rate As ordinary income taxed at her regular tax rateCorrect 1 of Item 1

Hide Feedback Correct Check My Work Feedback Gains from the sale or exchange of capital assets are taxed at various rates, depending upon the holding period, the taxpayer's regular tax rate, and the type of asset involved.

b. How can Sally achieve her desired result of not paying more than $15,000 of additional tax on the transaction? If required, round to the nearest dollar.

Sally would need to incur Select capital casualty ordinary Correct 1 of Item 2 losses of $.