Mary Watson bought 20 shares of stock two years ago.She recently sold her stock making a profit of $1,400.Long-term capital gain rates are 15% for her income level.She is in the 22% tax bracket.Her tax on this investment is:
A)$98.
B)$210.
C)$308.
D)$392.
E)$0.

Question

Quizplus · Accepted Answer

The tax on the investment is calculated based on the long-term capital gain rate of 15% (since the stock was held for more than a year), not her income tax bracket. Therefore, the tax on her $1,400 profit is 15% of $1,400, which equals $210.

Mary Watson Bought 20 Shares of Stock Two Years Ago