In July 2017,Hillary sells a stamp from her stamp collection at a gain of $500.Hillary purchased the stamp in 2010.If Hillary is in the 25% marginal tax rate bracket and has no other capital asset sales in 2017,what is her tax on the sale of the stamp?

Question

Quizplus · Accepted Answer

The stamp is a collectible, and gains from collectibles held for more than one year are taxed at a maximum rate of 28%. Therefore, the tax on the $500 gain is 28% of $500, which is $140. However, since Hillary is in the 25% tax bracket, her tax rate on the gain is limited to her marginal rate of 25%, resulting in a tax of $125 (25% of $500).

In July 2017,Hillary Sells a Stamp from Her Stamp Collection