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Problem 1: The Garcia's earned $40,000 in active income and $1,000 in long term capital gain. What is the amount of their taxes and their average tax rate if they filed joint return?
17400 (0.1) + (40000 - 17400(0.15) + 1000(0.15) = 5280Average rate = 5280/41000 = 0.12878
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