Question

Christopher sold 140 shares of Cisco stock for $8,820 in the current year. he purchased the shares serveral years ago for $3,640. assuming his ordinary income tax rate is 24 percent, and he 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 schedule. )
tax to be paid
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that's all the info I have on the question Christopher sold 140 shares of cisco for $8,820 in the current year. he purchased the shares several years ago for $3,640. assuming his ordinary income tax rate is 24 percent, and he no other capital gains or losses, how much tax wll he pay on this gain? (use the dividends and capital gains tax rates and tax rate schedule. )

Answer 1

Long-Term Capital Gain Tax is imposed on the profit from the sale of assets which are held for more than one year. The tax brackets are 0%, 15%, or 20%.

Christopher sold 140 shares of Cisco for $8820 which he had bought at $3640 before several years.

Hence,his long-term capital gain=

Sales proceed-basis of shares

$8820-$3640

=$5180

Since Christoper ordinary income tax rate is 24 percent the capital gain would be 15 percent.

So Christopher is liable to pay a capital gain tax of 15% of $5180=  (15/100) × $5180 =$777.