Question

Jen bought 100 shares of ABC stock at $15 a share on July 14, 2017. On August 7, 2018, she noticed that the stock had increased in value to $20 a share and decided to sell her shares. Jen's marginal tax rate is 22%. How is the revenue from the sale treated on her 2018 income tax return

Answer 1

The revenue from the sale treated as a long term capital gain on her 2018 income tax return

Step-by-step explanation:

capital gain = (100*20) - (100*15)

= $500

tax rate on long term capital gain for 22% = 15%

tax on capital gain = $500*15%

= $75

Therefore, The revenue from the sale treated as a long term capital gain on her 2018 income tax return