Question

Darlene purchases $20,000 worth of stock on his broker's advice and pays her broker a 15% broker fee. She sells her stock when it increases to $28,600 two years later, and uses a discount broker who charges $ 21 per trade. Complute Darlene's s net proceeds after the broker fees are taken out.

Answer 1

$ 5,621

Explanation:

$20,000 + 15% = 20000*1.15 = $23,000

Then we deduct the $21 assuming this has been done in a trade.

$23,000 - $21 = $22,979

So, she sells it at $28,600 - $22,979 = $ 5,621

Of course, this question is wholly written ambiguously. It's unclear if she buys $20,000 of stock, and pays a $3,000 commission which reduces her investment by that amount, or vice versa.

In any case, if you read it differently just change the numbers and multiply by .85, the rest you can figure out, just follow the logic.

That is not her Net proceeds; your teacher or whoever asked this question knows nothing about capital gains taxes. She will have to pay taxes. In 2021 and 2022, the capital gains tax rate is 0%, 15%, or 20% on most assets held for over a year. Capital gains taxes on assets held for a year or less correspond to ordinary income tax brackets: 10%, 12%, 22%, 24%, 32%, 35% or 37%