Mike borrowed $500,000 and used the full amount to acquire shares in a qualified small business...

 

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Mike borrowed $500,000 and used the full amount to acquire shares in a qualified small business corporation. Over the next few years, he deducted $100,000 in interest expenses related to the investment loan. This year, Mike sold the business for $950,000-he has not previously sold any type of qualified capital property. Assuming a lifetime capital gains exemption of $883,384, what is the MINIMUM amount on which Mike must pay tax following the disposition of his business? Mike borrowed $500,000 and used the full amount to acquire shares in a qualified small business corporation. Over the next few years, he deducted $100,000 in interest expenses related to the investment loan. This year, Mike sold the business for $950,000-he has not previously sold any type of qualified capital property. Assuming a lifetime capital gains exemption of $883,384, what is the MINIMUM amount on which Mike must pay tax following the disposition of his business?

Answer rating: 100% (QA)

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