As of November 30, 2015, Ms. B had $12,000 capital losses and no capital gains. She owns 4,900 shares of GG stock with a $15 basis and a $45 FMV per share. Ms. B plans to hold her stock for three more years before selling it and using the proceeds to buy a home. However, she could easily sell 400 shares to trigger a $12,000 capital gain and then immediately repurchase them. If Ms. B’s marginal tax rate is 39.6 percent and she uses a 4 percent discount rate to compute NPV, should she implement this strategy?
Answer to relevant QuestionsMr. and Mrs. Prinze are evaluating an investment in undeveloped land. The year 0 cost is $100,000, and they can borrow $60,000 of the purchase price at 8 percent. They will pay interest only in years 1 through 5. The annual ...Discuss the tax policy reasons why gifts and inheritances aren’t included in gross income. Assume that Congress amended the tax law to limit the itemized deduction for charitable contributions to 5 percent (rather than 50 percent) of AGI. Discuss the incidence of the tax increase represented by this expansion of ...Diane Bauman, a professional artist with AGI in excess of $75,000, made the following donations. Determine to what extent each donation is deductible on her Schedule A. a. $2,000 cash to the First Methodist Church of ...Sandy Assam enjoys betting on horse and dog races. This year, she won $4,308 and lost $6,735 on her gambling activities. If Sandy’s marginal tax rate is 25 percent, compute the after-tax cost of her gambling assuming ...
Post your question