Margo purchased 2,000 share of qualifying Section 1202 stock six years ago for $200,000.In the current year,she sold the stock for $2,000,000.How much gain can she exclude from her income?
A)$2,000,000
B)$1,800,000
C)$900,000
D)$200,000
E)None of the above

Question

Quizplus · Accepted Answer

Margo can exclude up to 50% of her gain from the sale of the qualifying Section 1202 stock. Her gain is $2,000,000 - $200,000 = $1,800,000. Therefore, she can exclude $900,000 (50% of $1,800,000) from her income. The remaining $900,000 is taxable.

Margo Purchased 2,000 Share of Qualifying Section 1202 Stock Six