Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Your parents bought you 1,000 shares of Disney stock on the day you were born (in 1990) for $8.73 per share. You held them until

image text in transcribed
Your parents bought you 1,000 shares of Disney stock on the day you were born (in 1990) for $8.73 per share. You held them until you were in college but your dad lost his job due to the Great Recession. You still had to pay your tuition bill so you sold the shares for $17.45 per share (in 2008). The government taxed you 15% of your (nominal) capital gain from the sale. hen purchased (1 990) hen sold (2008) Convert the value of the stock when it was purchased into its real value in 2008 $s using the CPI values in the table above. Your real capital gain is (amount you made selling the stock) (amount you paid convert to 2008 $3). The tax rate on your investment income is (taxes paid)/(rea| capital gain). What tax rate did you pay on this income? (Give your answer as a decimal, e.g. 15% is 0.15.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

What Environmentalists Need To Know About Economics

Authors: Jason Scorse

1st Edition

0230107311, 9780230107311

More Books

Students also viewed these Economics questions

Question

1. Check readers and library books. Is there ethnic diversity?

Answered: 1 week ago

Question

x-3+1, x23 Let f(x) = -*+3, * Answered: 1 week ago

Answered: 1 week ago