Thomas purchased 200 shares of stock A for $23 a share and sold them more than a year later for $ 19 per share. Be purchased 600 shares of stock B for $41 per share and sold them for $57 per share after holding them for more than a year. Both of the sales were in the same year. If Thomas is in a 35 % tax bracket, what will his capital gains tax be for the year

Question

Genesis Mathews

Business

7 October, 19:13

Thomas purchased 200 shares of stock A for $23 a share and sold them more than a year later for $ 19 per share. Be purchased 600 shares of stock B for $41 per share and sold them for $57 per share after holding them for more than a year. Both of the sales were in the same year. If Thomas is in a 35 % tax bracket, what will his capital gains tax be for the year

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Answers (1)

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Rolando Bernard · Answer 1

Capital gain tax = $1,540.

Explanation:

As per the data given in the question,

For stocks of A

Profit = (selling price - purchasing price) * units

= ($19 - $23) * 200

= - $800

For stocks of B

Profit = ($57-$41) * 600

= $9,600

Total profit = profit for stock A + profit for stock B

= - $800 + $9,600

= $8,800

Therefore, capital gain for both year = $8,800

Tax rate = 35%

Capital gain tax = Capital gain * Tax rate

= $8,800 * 35%

=$3,080

As share holds for more than a year,

So, Capital gain tax = $3,080 : 2 = $1,540.