In 2018, Alva received dividends on her stocks as follows: Amur Corporation (a French corporation whose stock is traded on $60,000 an established U.S. securities market) Blaze, Inc., a Delaware corporation 40,000 Grape, Inc., a Virginia corporation 22,000 If an amount is zero, enter "O" a. Alva purchased the Grape stock three years ago, and she purchased the Amur stock two years ago. She purchased the Blaze stock 18 days before it went ex-dividend and sold it 20 days later at a $5,000 loss. Alva had no other capital gains and losses for the year. She is in the 32% marginal tax bracket. The amount of her tax on qualifying dividends is The amount of her tax on nonqualifying dividends is The total tax on all her dividend income is

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Answer:

Qualifying dividends are taxed like capital gains (15% in Alva's case):

$60,000 from Amur + $22,000 from Grape ⇒ $62,000 x 15% = $12,300

Non-qualifying dividends are taxed as ordinary income (35%):

$40,000 from Grape ⇒ $40,000 x 35% = $14,000

Total taxes on Alva's dividend income = $12,300 + $14,000 = $26,300