Lenore has taxable income of $78,000 and a capital gain of $5,000. How much state tax will she pay on the capital gain?

The correct calculation for state tax on capital gains involves understanding the tax rates applicable to different types of income in California. In this scenario, Lenore has a capital gain of $5,000.

California taxes capital gains as regular income, meaning that the capital gain will be subject to the same tax rates as Lenore's ordinary taxable income. With Lenore's taxable income of $78,000, it's essential to determine the appropriate tax rate that would apply to her total income, which includes the capital gain.

In California, tax rates are progressive and vary based on income levels. For a single filer with an income in this range, the necessary tax brackets must be consulted to arrive at the applicable rate for the capital gain. If the marginal tax rate for her income bracket is around 9.3%, then applying that to the capital gain of $5,000 results in a tax amount of $465 for the gain specifically.

However, to find the correct answer based on the provided options, one may need to calculate differently or consider an average effective rate. Considering simplified brackets can also lead to different interpretations. In this case, if one looks at the flat rate estimates often simplified for quizzes or practice scenarios under specific treated incomes, the calculated