Henrich has $196,750 of taxable income, which includes $50,700 of long-term capital gain that is taxed at preferential rates. Assume his modified AGI is $213,500.
a) Calculate Henrich's effective tax rate.
b) Determine Henrich's taxable income excluding the long-term capital gain.
c) Identify the preferential tax rate applied to the long-term capital gain.
d) Calculate Henrich's modified AGI.