Irma and Dave Cedeno have a potential $2,000 capital gain on stock they have owned 11 months.They are in the 28 percent marginal tax bracket.How much longer would they have to hold this stock to reduce the tax liability on this gain?

Question

Quizplus · Accepted Answer

To reduce the tax liability on their capital gain, Irma and Dave Cedeno would need to hold the stock for a total of 12 months. Since they have owned the stock for 11 months, they need to hold it for 1 more month and 1 day to qualify for long-term capital gains tax rates, which are lower than short-term rates.

Irma and Dave Cedeno Have a Potential $2,000 Capital Gain