Question

Clarissa's income puts her in the bottom tax bracket (10%) last year. During the same year, she earned $250 in dividends and $75 in coupons on a government bond. In February, she purchased a common stock for $425. She sold the same stock eight months later for $600. What is the total Clarissa will pay in taxes on last year's investments?

Answer 1

75 in coupons.

250 in dividends.

profit of 600 - 425 = 175 from her stock investment.

her total income is 250 + 75 + 175 = 500.

if all of this is taxed at 10%, then her tax will be 500 * .1 = 50.