Serena purchased 10 shares of GLC,Inc.stock for $200 per share;one year later she sold the 10 shares for $220 a share.Over the year,the price level increased from 135.0 to 143.1.The tax rate on capital gains is 50 percent.If the capital gains tax is on nominal gains,how much tax does Serena pay on her gain?

Question

Quizplus · Accepted Answer

Serena's nominal gain is ($220 - $200) = $20 per share. 
Her total nominal gain is ($20 x 10) = $200.
50% of her nominal gain is ($200 x 0.5) = $100.
Therefore, Serena pays $100 in capital gains tax.

Serena Purchased 10 Shares of GLC,Inc