Question

Cory recently sold his qualified small business stock for $90,000 after holding it for 10 years. His basis in the stock is $40,000. Applying the rules as if the stock were acquired in 2020 and assuming his marginal tax rate is 32 percent, how much tax will he owe on the sale

Answer 1

$0

Step-by-step explanation:

Calculation for how much tax will he owe on the sale

Realized gain= $90,000 - $40,000

Realized gain = $50,000

Despite the fact that the realized gain was the amount of $50,000 , the total amount of $50,000 gain that was Realized on the qualified small business stock that was been acquired in the year 2020 and was withheld for than five years will be excluded from the tax .

Therefore the amount of tax that he will owe on the sale is $0