Christopher sold 100 shares of cisco stock for $5,500 in the current year. he purchased the shares several years ago for $2,200. assuming his ordinary income tax rate is 24 percent and he has no other capital gains or losses, how much tax will he pay on this gain?

tax at 15 %  gain = $495

Explanation:

given data

sold = 100 shares

Sale stock = $5,500

purchased shares = $2,200

income tax rate = 24 percent

to find out

how much tax will he pay on this gain

solution

we know here that at long term gain  we have given Sale value  and Cost of stocks

so here total Gain will be

gain = Sale value - Cost of stocks    1

put here value

gain = Sale value - Cost of stocks

gain = $5,500 - $2,200

gain = $3,300

so here we can say that

tax is 15 %

tax at 15 %  gain = 15 % of $3,300

tax at 15 %  gain = $495

as we know his marginal rate on ordinary gain is above 15%

so that capital gain must be 15%

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