Anne and Jose Romero are in the 28 percent marginal federal tax bracket.Two years ago they purchased 100 shares of ABC stock for $28 per share,paying commissions of $75.Last week they sold this stock for $35 per share and paid commissions of $50.How much is their taxable capital gain on this investment?

Question

Quizplus · Accepted Answer

The purchase price of the stock including commissions is:
100 x $28 + $75 = $2,875

The sale price of the stock including commissions is:
100 x $35 - $50 = $3,450

The capital gain is the difference between the sale price and the purchase price, which is:
$3,450 - $2,875 = $575

Since Anne and Jose are in the 28 percent marginal federal tax bracket, their capital gains tax rate is 15 percent. Therefore, their taxable capital gain on this investment is:
$575 x 0.15 = $86.25

So the best choice is C) $575.

Anne and Jose Romero Are in the 28 Percent Marginal