In November Lily informed you that she needs additional cash flow to meet her personal debt obligations. Lily does not want to sell more stock than she needs to because she wants appreciation within the stock market. Lily also wants to reduce her tax burden. The stock market has been stable, and it is assumed that the fair market value in November is representative of the fair market value throughout the next months.

Lilys marginal tax rate is and her capital gains tax rate is

Stock Date Purchased Tax Basis Fair Market Value

Fuchsia Inc. $$

Grey Corp. $$

Blue Corp. $$

Magenta Inc. $$

Green Corp. $$

Beige Inc. $$

Mauve Inc. $$

a Lily has asked you to advise her on the stock to sell on December Selling which combination of stock results in the least cash tax cost?

a Fuchsia Inc., Magenta Inc., and Beige Inc.

b Mauve Inc., Fuchsia Inc., and Magenta Inc.

c Green Corp., Fuchsia Inc., and Blue Corp.

d Blue Corp., Grey Corp, and Fuchsia Inc.

Answer rating: 100% (QA)

Here are the steps to solve this problem Calculate capital gainslosses for each stock Fuchsia 75000 ... View the full answer