# 1. William bought $10,000 of ABC mutual fund. He sold it for $15,000 after 3 years. He...

## Question:

1. William bought $10,000 of ABC mutual fund. He sold it for $15,000 after 3 years. He received he received $3000 in re-invested dividends during the first 2 years. If William is in 40% tax bracket, how much taxes will he pay in the year he sold the fund? Show three steps in your calculations: Adjusted cost base, capital gains and taxes.

2. Mary bought a segregated for $400,000 in 2004. Her husband is the sole beneficiary of the plan. In 2013, Mary passed away from a terrible disease. Answer the following questions. Show all calculations and/or explanations

a) if at the time of death, the value of the plan dropped to $200,000, what is the death benefit payout?

b) If at the time of death, the value of the plan increased to $500,000, what is the death benefit payout?

c)If at the time of death, the value of the plan dropped to $250,000, what is the total amount that Mary's husband will get?

**Related Book For**

## Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill