Refactor the regular_tax_before_credits variable and add unit tests

changelog_entry.yaml

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+- bump: minor
+  changes:
+    added:
+      - Refactor the regular_tax_before_credits variable and add unit tests. 

policyengine_us/parameters/gov/irs/capital_gains/in_effect.yaml

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+description: Whether the additional lines apply to Schedule D Tax Worksheet.
+values:
+  0000-01-01: false
+  2018-01-01: true
+metadata:
+  unit: bool
+  period: year
+  label: Schedule D Tax Worksheet additional line in effect
+  reference:
+    - title: 2017 Instructions for Schedule D - line 19
+      href: https://www.irs.gov/pub/irs-prior/i1040sd--2017.pdf#page=15
+    - title: 2018 Instructions for Schedule D - line 18b
+      href: https://www.irs.gov/pub/irs-prior/i1040sd--2018.pdf#page=19
+    - title: 2019 Instructions for Schedule D - line 19
+      href: https://www.irs.gov/pub/irs-prior/i1040sd--2019.pdf#page=16

policyengine_us/parameters/gov/irs/capital_gains/taxable_income_limit.yaml

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+description: Taxable income thresholds and limits.
+metadata:
+  unit: currency-USD
+  period: year
+  label: Taxable income thresholds
+  breakdown: filing_status
+  reference:
+    - title: 2018 Instructions for Schedule D - line 18b
+      href: https://www.irs.gov/pub/irs-prior/i1040sd--2018.pdf#page=19
+    - title: 2019 Instructions for Schedule D - line 19
+      href: https://www.irs.gov/pub/irs-prior/i1040sd--2019.pdf#page=16
+    - title: 2020 Instructions for Schedule D - line 19
+      href: https://www.irs.gov/pub/irs-prior/i1040sd--2020.pdf#page=16
+    - title: 2021 Instructions for Schedule D - line 19
+      href: https://www.irs.gov/pub/irs-prior/i1040sd--2021.pdf#page=16
+    - title: 2022 Instructions for Schedule D - line 19
+      href: https://www.irs.gov/pub/irs-prior/i1040sd--2022.pdf#page=16
+    - title: 2023 Instructions for Schedule D - line 19
+      href: https://www.irs.gov/pub/irs-prior/i1040sd--2023.pdf#page=16
+
+SINGLE:
+  2018-01-01: 157_500
+  2019-01-01: 160_725
+  2020-01-01: 163_300
+  2021-01-01: 164_925
+  2022-01-01: 170_050
+  2023-01-01: 182_100
+JOINT:
+  2018-01-01: 315_000
+  2019-01-01: 321_450
+  2020-01-01: 326_600
+  2021-01-01: 329_850
+  2022-01-01: 340_100
+  2023-01-01: 364_200
+SEPARATE:
+  2018-01-01: 157_500
+  2019-01-01: 160_725
+  2020-01-01: 163_300
+  2021-01-01: 164_925
+  2022-01-01: 170_050
+  2023-01-01: 182_100
+HEAD_OF_HOUSEHOLD:
+  2018-01-01: 157_500
+  2019-01-01: 160_700
+  2020-01-01: 163_300
+  2021-01-01: 164_900
+  2022-01-01: 170_050
+  2023-01-01: 182_100
+SURVIVING_SPOUSE:
+  2018-01-01: 315_000
+  2019-01-01: 321_450
+  2020-01-01: 326_600
+  2021-01-01: 329_850
+  2022-01-01: 340_100
+  2023-01-01: 364_200

policyengine_us/tests/policy/baseline/gov/irs/tax/federal_income/capital_gains/adjusted_capital_gains_reduced_by_investment_income.yaml

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+- name: non_sch_d_capital_gains > 0, investment_income_form_4952 > 0
+  period: 2019
+  input:
+    long_term_capital_gains: 2_000
+    qualified_dividend_income: 2_000
+    net_capital_gains: 1_000
+    non_sch_d_capital_gains: 3_000
+    investment_income_form_4952: 2_000
+  output: # 3000 - min(0, 2000)
+    adjusted_capital_gains_reduced_by_investment_income: 3_000
+
+- name: non_sch_d_capital_gains > 0, investment_income_form_4952 < 0
+  period: 2019
+  input:
+    long_term_capital_gains: 2_000
+    qualified_dividend_income: 2_000
+    net_capital_gains: 1_000
+    non_sch_d_capital_gains: 3_000
+    investment_income_form_4952: -2_000
+  output: # 3000 - min(0, -2000)
+    adjusted_capital_gains_reduced_by_investment_income: 5_000
+
+- name: non_sch_d_capital_gains < 0, investment_income_form_4952 < 0
+  period: 2019
+  input:
+    long_term_capital_gains: 2_000
+    qualified_dividend_income: 2_000
+    net_capital_gains: 1_000
+    non_sch_d_capital_gains: -1_000
+    investment_income_form_4952: -2_000
+  output: # min(2000 + 2000, 1000) - 1000 - min(0, -2000)
+    adjusted_capital_gains_reduced_by_investment_income: 2_000
+
+- name: non_sch_d_capital_gains < 0, investment_income_form_4952 > 0
+  period: 2019
+  input:
+    long_term_capital_gains: 2_000
+    qualified_dividend_income: 2_000
+    net_capital_gains: 1_000
+    non_sch_d_capital_gains: -3_000
+    investment_income_form_4952: 2_000
+  output: # min(2000 + 2000, 1000) - 3000 - min(0, 2000)
+    adjusted_capital_gains_reduced_by_investment_income: 0

policyengine_us/tests/policy/baseline/gov/irs/tax/federal_income/capital_gains/computed_dividends_gains_whether_has_gains.yaml

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+- name: has_qdiv_or_ltcg
+  period: 2019
+  input:
+    reduced_qualified_dividends_by_adjusted_investment_interest: 1_000
+    adjusted_capital_gains_reduced_by_investment_income: 1_000
+    long_term_capital_gains: 2_000
+    qualified_dividend_income: 2_000
+    net_capital_gains: 1_000
+    non_sch_d_capital_gains: 1_000
+    has_qdiv_or_ltcg: true
+  output: # 1000 + 1000
+    computed_dividends_gains_whether_has_gains: 2_000
+
+- name: no has_qdiv_or_ltcg, add_qdiv_or_ltcg > net_capital_gains
+  period: 2019
+  input:
+    reduced_qualified_dividends_by_adjusted_investment_interest: 1_000
+    adjusted_capital_gains_reduced_by_investment_income: 1_000
+    long_term_capital_gains: 2_000
+    qualified_dividend_income: 2_000
+    net_capital_gains: 1_000
+    non_sch_d_capital_gains: 2_000
+    has_qdiv_or_ltcg: false
+  output: # min(2000 + 2000, 1000) + 2000
+    computed_dividends_gains_whether_has_gains: 3_000
+
+- name: no has_qdiv_or_ltcg, add_qdiv_or_ltcg < net_capital_gains
+  period: 2019
+  input:
+    reduced_qualified_dividends_by_adjusted_investment_interest: 1_000
+    adjusted_capital_gains_reduced_by_investment_income: 1_000
+    long_term_capital_gains: 2_000
+    qualified_dividend_income: 2_000
+    net_capital_gains: 5_000
+    non_sch_d_capital_gains: 2_000
+    has_qdiv_or_ltcg: false
+  output: # min(2000 + 2000, 5000) + 2000
+    computed_dividends_gains_whether_has_gains: 6_000
+
+- name: no has_qdiv_or_ltcg, net_capital_gains < 0
+  period: 2019
+  input:
+    reduced_qualified_dividends_by_adjusted_investment_interest: 1_000
+    adjusted_capital_gains_reduced_by_investment_income: 1_000
+    long_term_capital_gains: 2_000
+    qualified_dividend_income: 2_000
+    net_capital_gains: -1_000
+    non_sch_d_capital_gains: 4_000
+    has_qdiv_or_ltcg: false
+  output: # max(0, min(2000 + 2000, -1000)) + 4000
+    computed_dividends_gains_whether_has_gains: 4_000

policyengine_us/tests/policy/baseline/gov/irs/tax/federal_income/capital_gains/computed_final_gains_after_all_adjustments.yaml

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+- name: has_qdiv_or_ltcg, taxable_income_minus_gains < taxable_income < capital_gains
+  period: 2017
+  input:
+    filing_status: SINGLE
+    taxable_income: 4_000
+    taxable_income_minus_gains: 3_000
+    computed_dividends_gains_whether_has_gains: 2_000
+    has_qdiv_or_ltcg: true
+  output: # max(min(37950, 4000, 3000), 4000 - 2000) * 1
+    computed_final_gains_after_all_adjustments: 3_000
+
+- name: has_qdiv_or_ltcg, capital_gains < taxable_income_minus_gains < taxable_income
+  period: 2017
+  input:
+    filing_status: SINGLE
+    taxable_income: 50_000
+    taxable_income_minus_gains: 45_000
+    computed_dividends_gains_whether_has_gains: 20_000
+    has_qdiv_or_ltcg: true
+  output: # max(min(37950, 50000, 45000), 50000 - 20000) * 1
+    computed_final_gains_after_all_adjustments: 37_950
+
+- name: has_qdiv_or_ltcg, capital_gains < taxable_income_minus_gains < taxable_income, taxable_income < computed_dividends_gains_whether_has_gains
+  period: 2017
+  input:
+    filing_status: SINGLE
+    taxable_income: 10_000
+    taxable_income_minus_gains: 5_000
+    computed_dividends_gains_whether_has_gains: 20_000
+    has_qdiv_or_ltcg: true
+  output: # max(min(37950, 10000, 5000), 10000 - 20000) * 1
+    computed_final_gains_after_all_adjustments: 5_000
+
+- name: no has_qdiv_or_ltcg
+  period: 2017
+  input:
+    filing_status: SINGLE
+    taxable_income: 10_000
+    taxable_income_minus_gains: 5_000
+    computed_dividends_gains_whether_has_gains: 20_000
+    has_qdiv_or_ltcg: false
+  output: # max(min(37950, 10000, 5000), 10000 - 20000) * 0
+    computed_final_gains_after_all_adjustments: 0
+
+- name: with additional steps
+  period: 2018
+  input:
+    filing_status: SINGLE
+    taxable_income: 200_000
+    taxable_income_minus_gains: 190_000
+    computed_dividends_gains_whether_has_gains: 50_000
+    has_qdiv_or_ltcg: true
+  output: # max(min(157500, 200000, 190000), 200000 - 50000) * 1
+    computed_final_gains_after_all_adjustments: 157_500

policyengine_us/tests/policy/baseline/gov/irs/tax/federal_income/capital_gains/computed_gains_after_1250_and_28_percent_rate_gains.yaml

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+- name: has_qdiv_or_ltcg, added_1250_and_28_percent_rate_gains < adjusted_capital_gains_reduced_by_investment_income
+  period: 2019
+  input:
+    unrecaptured_section_1250_gain: 1_000
+    capital_gains_28_percent_rate_gain: 1_000
+    adjusted_capital_gains_reduced_by_investment_income: 3_000
+    computed_dividends_gains_whether_has_gains: 2_000
+    has_qdiv_or_ltcg: true
+  output: # (2000 - min(1000 + 1000, 3000)) * 1
+    computed_gains_after_1250_and_28_percent_rate_gains: 0
+
+- name: has_qdiv_or_ltcg, added_1250_and_28_percent_rate_gains < adjusted_capital_gains_reduced_by_investment_income
+  period: 2019
+  input:
+    unrecaptured_section_1250_gain: 1_000
+    capital_gains_28_percent_rate_gain: 1_000
+    adjusted_capital_gains_reduced_by_investment_income: 1_000
+    computed_dividends_gains_whether_has_gains: 2_000
+    has_qdiv_or_ltcg: true
+  output: # (2000 - min(1000 + 1000, 1000)) * 1
+    computed_gains_after_1250_and_28_percent_rate_gains: 1_000
+
+- name: no has_qdiv_or_ltcg
+  period: 2019
+  input:
+    unrecaptured_section_1250_gain: 1_000
+    capital_gains_28_percent_rate_gain: 1_000
+    adjusted_capital_gains_reduced_by_investment_income: 1_000
+    computed_dividends_gains_whether_has_gains: 2_000
+    has_qdiv_or_ltcg: false
+  output: # (2000 - min(1000 + 1000, 1000)) * 0
+    computed_gains_after_1250_and_28_percent_rate_gains: 0
+
+- name: negative result
+  period: 2019
+  input:
+    unrecaptured_section_1250_gain: 2_000
+    capital_gains_28_percent_rate_gain: 1_000
+    adjusted_capital_gains_reduced_by_investment_income: 4_000
+    computed_dividends_gains_whether_has_gains: 2_000
+    has_qdiv_or_ltcg: true
+  output: # (2000 - min(2000 + 1000, 4000)) * 1
+    computed_gains_after_1250_and_28_percent_rate_gains: -1_000

policyengine_us/tests/policy/baseline/gov/irs/tax/federal_income/capital_gains/reduced_qualified_dividends_by_adjusted_investment_interest.yaml

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+- name: qualified_dividend_income larger than investment_income_form_4952
+  period: 2019
+  input:
+    qualified_dividend_income: 2_000
+    investment_income_form_4952: 1_000
+  output:
+    reduced_qualified_dividends_by_adjusted_investment_interest: 1_000
+
+- name: qualified_dividend_income smaller than investment_income_form_4952
+  period: 2019
+  input:
+    qualified_dividend_income: 1_000
+    investment_income_form_4952: 2_000
+  output:
+    reduced_qualified_dividends_by_adjusted_investment_interest: 0
+
+- name: investment_income_form_4952 smaller than 0
+  period: 2019
+  input:
+    qualified_dividend_income: 2_000
+    investment_income_form_4952: -2_000
+  output:
+    reduced_qualified_dividends_by_adjusted_investment_interest: 2_000

policyengine_us/tests/policy/baseline/gov/irs/tax/federal_income/capital_gains/taxable_income_minus_gains.yaml

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+- name: has_qdiv_or_ltcg, taxable_income > computed_gains_after_1250_and_28_percent_rate_gains
+  period: 2019
+  input:
+    taxable_income: 3_000
+    computed_gains_after_1250_and_28_percent_rate_gains: 1_000
+    has_qdiv_or_ltcg: true
+  output: # (3000 - 1000) * 1
+    taxable_income_minus_gains: 2_000
+
+- name: has_qdiv_or_ltcg, taxable_income < computed_gains_after_1250_and_28_percent_rate_gains
+  period: 2019
+  input:
+    taxable_income: 3_000
+    computed_gains_after_1250_and_28_percent_rate_gains: 4_000
+    has_qdiv_or_ltcg: true
+  output: # (3000 - 4000) * 1
+    taxable_income_minus_gains: 0
+
+- name: no has_qdiv_or_ltcg
+  period: 2019
+  input:
+    taxable_income: 3_000
+    computed_gains_after_1250_and_28_percent_rate_gains: 1_000
+    has_qdiv_or_ltcg: false
+  output: # (3000 - 1000) * 0
+    taxable_income_minus_gains: 0

policyengine_us/variables/gov/irs/tax/federal_income/alternative_minimum_tax/capital_gains_taxable_difference_after_gains_adjustments.py

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+from policyengine_us.model_api import *
+
+
+class capital_gains_taxable_difference_after_gains_adjustments(Variable):
+    value_type = float
+    entity = TaxUnit
+    definition_period = YEAR
+    label = (
+        "Capital gains taxable difference after gains adjustments"  # DWKS20
+    )
+    unit = USD
+    reference = (
+        "https://www.irs.gov/pub/irs-pdf/f1040sd.pdf",
+        "https://www.irs.gov/pub/irs-prior/i1040sd--2017.pdf#page=15",
+        "https://www.irs.gov/pub/irs-prior/i1040sd--2018.pdf#page=19",
+        "https://www.irs.gov/pub/irs-prior/i1040sd--2023.pdf#page=16",
+    )
+
+    def formula(tax_unit, period, parameters):
+        # Schedule D Tax Worksheet line 1
+        taxable_income = tax_unit("taxable_income", period)  # dwks1
+        # Schedule D Tax Worksheet line 15
+        filing_status = tax_unit("filing_status", period)
+        capital_gains = parameters(period).gov.irs.capital_gains.brackets
+        # Schedule D Tax Worksheet line 16
+        min_capital_gains_and_taxable_income_1 = min_(
+            capital_gains.thresholds["1"][filing_status], taxable_income
+        )  # dwks16
+        # Schedule D Tax Worksheet line 17
+        min_capital_gains_and_taxable_income_and_taxable_income_minus_gains = (
+            min_(
+                tax_unit("taxable_income_minus_gains", period),
+                min_capital_gains_and_taxable_income_1,
+            )
+        )  # dwks17 = min_(tax_unit("dwks14", period), dwks16)
+        # Schedule D Tax Worksheet line 20 for 2017 and 2018, or line 22 for years after
+        return (
+            min_capital_gains_and_taxable_income_1
+            - min_capital_gains_and_taxable_income_and_taxable_income_minus_gains
+        )  # dwks20 = dwks16 - dwks17