In July 2013,Harriet sells a stamp from her stamp collection at a gain of $500.Harriet purchased the stamp in 2008.If Harriet is in the 33% marginal tax rate bracket and has no other capital asset sales in 2013,what is her tax on the sale of the stamp?

Question

Quizplus · Accepted Answer

Harriet's capital gain is $500, but since she purchased the stamp in 2008, she has held it for more than one year, making it a long-term capital gain. Long-term capital gains are taxed at a lower rate than ordinary income tax rates. For someone in the 33% marginal tax bracket, the long-term capital gains tax rate is 15%. Therefore, Harriet's tax on the sale of the stamp is 15% of $500, which is $75. So, the correct choice is D, $140.

In July 2013,Harriet Sells a Stamp from Her Stamp Collection