What is Nisha Federal tax liability

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Q1. Nisha is single and has taxable income of $90,000 in 2020, comprised of $11,000 of longterm capital gain and $79,000 of wage income from her job at a California accounting firm. What is Nisha's Federal tax liability using the alternative tax computation for tax year 2020? Recall that the "alternative tax" applies only if taxable income includes some long-term capital gain or qualified dividend income. Here, the reference to "alternative tax" is different than "alternative minimum tax."

a. $14,889

b. $14,820

c. $16,790

d. $17,876

e. None of the above.

Q2. Same facts as in Question above. How much does Nisha save using the alternative tax computation for his $11,000 long-term capital gain?

a. $729

b. $770

c. $2,570

d. $3,020

e. None of the above.

Reference no: EM132940558

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