Michelle and Patrick are in the 24% marginal tax bracket. They bought 100 shares of DJN stock at $45 per share and sold them 4 years later in 2018 at $22 per share? By how much did their loss reduce their taxes in the year when they sold the stock?

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Quizplus · Accepted Answer

The loss on the sale of the stock is calculated as (purchase price - sale price) * number of shares = ($45 - $22) * 100 = $23 * 100 = $2300. Since they are in the 24% tax bracket, the tax reduction would be 24% of $2300 = 0.24 * $2300 = $552.

Michelle and Patrick Are in the 24% Marginal Tax Bracket