A piece of property bought by XYZ Corporation a few years ago was sold for $5 M. The cost basis for this property was $2.75 M. The company had a taxable income of $12.15 million in the year the property was sold.
The capital gain tax on this property is $337,500.

Question

Quizplus · Accepted Answer

The capital gain tax is calculated as (selling price - cost basis) * tax rate. In this case, the capital gain is $5 M - $2.75 M = $2.25 M. The tax rate for capital gains is 15%, so the capital gain tax is $2.25 M * 0.15 = $337,500.

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