Question

christopher sold 210 shares of cisco stock (nasdaq: csco) for $16,170 in the current year. he purchased the shares several years ago for $6,930. assuming his ordinary income tax rate is 24 percent and he has no other capital gains or losses, how much tax will he pay on this gain? (use the dividends and capital gains tax rates and tax rate schedules.)

Answer 1

The capital gains on Christopher's sale of Cisco stock is $9,240. If taxed at his ordinary income tax rate of 24%, he would pay $2,217.60 in tax. The actual capital gains tax rate may vary, so the exact tax could differ.

Step-by-step explanation:

The student, Christopher, sold 210 shares of Cisco stock for $16,170 and purchased them for $6,930. To calculate the capital gains, we subtract the purchase price from the selling price. Therefore, the gain is: $16,170 - $6,930 = $9,240. Capital gains tax will be applied to this gain. Assuming that the long-term capital gains tax rate applies (which is usually lower than the ordinary income tax rate), and without knowing the specific rate based on his tax bracket, we cannot provide the exact tax amount. However, if his capital gains tax rate was the same as his ordinary rate of 24%, he would pay 24% of $9,240, which is $2,217.60 in tax on this gain.