Sally bought a share of Stryker for $200 in year 1 and sold that share in year 2 for $400. The inflation rate between year 1 and year 2 was 50%. If the capital gains tax is 50%, what is Sally's actual after-tax capital gain if the tax is applied to nominal gains? What if the tax is on actual profits?

Answer rating: 100% (QA)

To calculate Sallys actual aftertax capital gain we need to consider both scenarios separately when ... View the full answer