Maya expects to report about $2 million of AGI and $1.7 million of taxable income. Her AGI is composed of $1.25 million of salary, and the balance is investment income. Maya is thinking about selling some stock before year- end. She purchased the stock three years ago and expects to recognize a $500,000 gain. How much federal tax will she pay in total on the stock gain?

Question

Quizplus · Accepted Answer

The stock gain is a long-term capital gain, taxed at a maximum rate of 23.8% (20% capital gains tax rate plus 3.8% net investment income tax) for high-income earners like Maya. Therefore, $500,000 x 23.8% = $119,000.

Maya Expects to Report About $2 Million of AGI and $1.7