Homework Answers
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 220 shares of Cisco for $ 17,380 which he had bought at $7,040 before several years. Hence,his long-term capital gain=sales proceed - basis of shares
= $17,380 -$7040
=$10,340
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 $10,340= (15/100) × $10,340 =$1,551.
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