You purchase 100 shares of stock in a real estate investment trust (REIT) for $46

($4,600). You receive distributions of $2.00 a share consisting of $0.70 in ordinary income, $0.30 in long-term capital gains, and $1.00 in return of capital.

a) If you sell the shares for $50, what is the percentage return on your investment?

b) If you are in the 25 percent income tax bracket and pay 15 percent on long-term capital gains, what are the taxes owed on the distributions?

c) If you sell the shares for a long-term capital gain, what is the tax owed on the gain?