Question

Use the following information from questions 6-12. In both 2018 and 2019 you expect to receive a W2 for $200,000; $65,000 will be already withheld on your W2 for federal income taxes and your income tax bracket is 32%. The short term capital gains on investments (<1 year) are taxed like income, long term capital gains on investments (> 1 year) are taxed at 15%, and dividends are taxed at 22%. Besides your W2 income, the only income you have to report is from one stock on the 1099-B issued by your broker: . On January 1, 2018, you purchased 100 shares of stock at $50 per share; you based your investment decision on publically available sources which speculate the share's price will increase dramatically at some point over the next two years July st, 2018, is the ex-dividend date for the stock - that morning you received a special onetime cash dividend of $2 per share and the stock closed at $48 per share . On November 29th, 2018, the company announced great news about a clinical drug trial and the share price begins to rise . On November 30th, 2018, you purchased 20 shares of stock at $80 per share . On December 1st, 2018, there was a 2 for 1 stock split . On December 2nd, 2018, you sold 50 shares of stock at $100 per share . On January 2, 2019, you sold 70 shares at $90 per share You do not receive any dividends in 2019 . On December 31, 2019, you sell any remaining shares at $30 per share All stock prices quoted above are at market close on the day referenced Assume shares that were purchased first were sold first (i.e. FIFO) Assume there are no transaction costs

Answer 1

Basic info

tax rates

income tax 32%

short term capital gain 32% (are taxed like income)

longterm capital gain 15%

dividend tax 22%

10.ana a.27.5$

ist buy 100 shares @ 50 each = 5000$

2nd buy 20 shares @80= 1600$

total price 6600

after share split the total share will be double i.e 120 x 2= 240

cost per share is 6600/ 240= 27.5$

11. ans a 203736$

12.ans a 318$