Return to the facts of problem 48. Assume that Yorgi purchased the qualified small business stock in Gnu Company, Inc., on September 15, 2009, and sells the shares for $400,000 on December 30, 2020.

a. Determine the amount of realized and recognized gain on the sale.

b. What is Yorgi’s effective tax rate on this transaction?

Data from Problem 48

Yorgi purchases qualified small business stock in Gnu Company, Inc., on September 15, 2008, for $50,000. She sells the shares for $400,000 on December 30, 2020. The stock retains its qualified small business status through the date of the sale.