During August 2015, Madeline invests $400,000 in Qual Company, Inc., buying 100,000 shares of stock. Her broker tells her this will be an excellent investment because the securities are qualified small business stock. He predicts the stock will triple in value over the next 3 years. At the end of 2019, Madeline's shares are valued at $700,000. Madeline is encouraged. She decides that she will cash out of the investment sometime in 2020 if the stock continues to appreciate. Madeline comes to you for advice. Complete the letter below advising her what she should do. Ms. Madeline Powers 345 Trailway Drive Potwan, Texas, 73347 December 1, 2019 Dear Ms. Powers: If the stock triples in value as predicted by your stockbroker, you will realize a gain of s on the sale in December 2020. Normally, the gain would be taxed at years. Individuals may exclude % of the realized gain on qualified small business stock if purchased after September 27, 2010 V . Therefore, This will save you $ in taxes on this transaction alone. %. However, your investment can be qualified small business stock only if you hold it for your stock is considered to be qualified small business stock, you will not be taxed on it. If you expect the price of the stock to decline, you may want to consider selling it month Please let me know if you have any questions. Sincerely, Kathy Pittes, CPA