John Jones is unmarried with no dependents. During the year he sold common stock

Question

John Jones is unmarried with no dependents. During the year he sold common stock in the following companies: John carried over a long-term capital loss of $3,500 from 2011. His taxable w3geswere $65,993 in 2012. His employer with held S8, 825 for federal taxes. John's only other items of gross income during the year were$756 of bank interest and $450 of state bond interest. Although he is an active participants his employer's 401K plan, in November he contributed $2,500 to his traditional IRA. Determine John's tax owed or tax refund for 2012

Explanation / Answer

in 2012 he made 1180 - 373 + 5274 = $6081. He carried over 3500 in losses. So capital gains in 2012 is 2581 and 756 + 450 in interest - 2500 contribution => hence the tax is 25% of 1287 = $321.75

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