One year ago Sam purchased bonds for $100,000. He just sold them for $120,000. During the year the price level rose by 5%. If the tax rate on capital gains is 20%, how much did Sam gain in real terms?
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- Marlo and Merlins son, Alex, needs 20,000 to start a business. They have 30,000 in securities that they can use to give him the capital he needs. Pertinent information regarding the securities is given below: Marlo and Merlin are in the 28 percent marginal tax rate bracket; Alex is in the 15 percent marginal tax rate bracket. Neither Marlo, Merlin, nor Alex has any other capital asset transactions during the year. Alexs basis in any of the securities gifted to him will be the lesser of his parents basis or the fair market value of the security. Discuss the tax effects of alternate methods of transferring 20,000 to Alex, and devise an optimal plan for making the transfer.Samuel Jenkins made two invstments, the first was 13 months ago and the second was two months ago. He just sold both investments and has a capital gain of $3,000 on each. If Samuel is in the 28 percent tax bracket, what will be the amount of capital gains tax on each investment?You are single and earns and income of $80,000 a year. Recently, you sold stocks that you had held longer than a year for a gain of $10,000. How much tax will you pay on this gain?
- Carmen Santiago decided to invest $12,000 in shares of the AT&T company that pays her 5% in dividends each year. In 5 years, she will sell the shares for market value, which she estimates will have increased in value by 1% of their original value. The combined marginal tax rate she applies is 39%. If the inflation rate is 6%, DETERMINE: The internal rate of return before taxes, ignoring inflationAt the start of the year, Josh has assets worth $500,000. He has debts worth $350,000. Over the year, he earns $200,000 of which he pays $50,000 in tax. He spends $50,000 on goods and services. He pays interest on his debt at 10% of $350,000. He pays off $30,000 of his debts.His assets go up in value by $25,000. What is his net worth at the end of year.At the beginning of the year, Mr. Lanier put $50,000 cash into Investment X. At the end of the year, he received a check for $2,800, representing his annual return on the investment. Mr. Lanier’s marginal tax rate on ordinary income is 37 percent. However, his return on Investment X is a capital gain taxed at 20 percent. At the beginning of the year, Mr. Lanier could have invested his $50,000 in Business Z with an 8 percent annual return. However, this return would have been ordinary income rather than capital gain. Required: Considering the fact that Mr. Lanier could have invested in Business Z, how much implicit tax did he pay with respect to Investment X? Did Mr. Lanier make the correct decision by putting his $50,000 into Investment X instead of Business Z?
- Matt recently deposited $41,250 in a savings account paying a guaranteed interest rate of 2.6 percent for the next 10 years. If Matt expects his marginal tax rate to be 22.00 percent for the next 10 years, how much interest will he earn after-tax for the first year of his investment? How much interest will he earn after-tax for the second year of his investment if he withdraws enough cash every year to pay the tax on the interest he earns? How much will he have in the account after 4 years? How much will he have in the account after 7 years?One year ago, Richard purchased 40 shares of common stock for $10 per share. During the year, he received one dividend payment in the amount of $0.50 per share. If the stock currently is worth $9 per share, what yield did Richard earn on his investment for the year?1.) The client inherited stocks from their grandfather when he passed away. Their grandfather bought half of them a month ago for $100,000 and they are now worth $150,000. The other half was purchased two years ago for $250,000 and they are now worth $500,000. The client wants to sell them tomorrow - what will the tax consequences be?
- Hayley recently invested $31,000 in a public utility stock paying a 6 percent annual dividend. (Hayley’s marginal income tax rate is 32 percent.) Use Tax Rate Schedule, Dividends and Capital Gains Tax Rates for reference. Required: If Hayley reinvests the annual dividend she receives net of any taxes owed on the dividend, how much will her investment be worth in five years if the dividends paid are qualified dividends? What will her investment be worth in five years if the dividends are nonqualified?Samuel Jenkins made two investments; the first was 13 months ago and the second was two months ago. He just sold both investments and has a capital gain of $10,000 on each. If Samuel is single and has taxable income of $40,000, what will be the amount of capital gains tax on each investment? See Capital Gains table and Taxable income rate table. Investment 1: held 13 months: whats the capital gains tax? Investment 2: held 2 months: Whats the capital gains tax?Tom sold mutual fund shares he had him three years ago so that he could use the proceeds to return to college Thomas in the 15% marginal tax bracket in his capital gains from the scale were $96,355. How much tax would Tom Owen those gains?
