Calculating taxes on capital gains takes a little work, but if you buy and sell stocks, bonds, works of art, or homes, you€™ll probably have to do this at some point. Let€™s practice. In a few of the following cases, the price will fall€”just record that as a negative rise (a €œcapital loss,€ in tax jargon). (In some cases, you can use these to offset taxes on capital gains but we won€™t get into that detail here.)
a. Fill in the table.

b. One nice thing about the capital gains tax is that you can choose what year to pay it by choosing what year to sell your investment. If you wanted to sell your single share of Berkshire stock and your Picasso in the same year, how much tax would you pay?

Transcribed Image Text:

Purchase Price 2015 Sale Price 2020 Tax Due at 15% Rate Capital em 10 Shares of Microsoft Stock 1 Share of Berkshire Gain $1,200 $1,250 $50 $7.50 Hathaway stock $8,000 $1,000 $15,000 $2,000 $11,000 $500 $14,000 S3,500 100 Shares of GM stock 1 Picasso napkin sketch 1 Mexican Amate folk painting