In September 2018, Eduardo sells stock he purchased in October 2014 at a gain of $5,000. If Eduardo is in the 10% marginal tax rate bracket and he has no other capital asset sales in 2018, what is his tax on the sale of the stock?
A)$- 0 -
B)$500
C)$750
D)$1,000
E)$1,250

Question

Quizplus · Accepted Answer

Since Eduardo held the stock for more than a year, the gain qualifies as a long-term capital gain. In the United States, for taxpayers in the 10% and 12% marginal income tax brackets, the long-term capital gains tax rate is 0%. Therefore, Eduardo would owe $0 in taxes on the sale of the stock.

In September 2018, Eduardo Sells Stock He Purchased in October