Paying taxes on stocksSuppose Shen is in the $22\%$ tax bracket.

Compute the taxes Shen pays each year on dividends and capital gains from this investment by completing the second column in the table.

Note: Throughout this problem, please round your answers to the nearest cent.

The total amount of investment income $($pre$-$taxes$)$ that Shen earned on this investment over the course of $2$ years is

The total amount that Shen pays in taxes on income from this investment income is

What does it mean to invest in stocks?

Common stock is considered to be one of the most popular investment vehicles for long$-$term wealth building. Investors earn income from common

stock in the form of dividends and$/$or capital gains. As an investor it is important to understand the implications of investing in stocks from a tax

perspective.

Calculating taxes owed on Shen's investment

Two years ago, Shen purchased $100$ shares of a particular company's stock at a price of $$88\mathrm{.}15$ per share. Last year, Shen received an annual dividend

of $$1\mathrm{.}20$ per share, and at the end of the year, a share of stock was trading at $$88\mathrm{.}32$ per share. This year, Shen received an annual dividend of $$1\mathrm{.}32$

per share and at the end of the year sold all $100$ shares at a price of $$98\mathrm{.}53$ per share.

In the first column of the following table, enter the total annual dividends Shen received each year, as well as the total capital gains at the end of each

year.

 

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Suppose Shen is in the 22% tax bracket. Compute the taxes Shen pays each year on dividends and capital gains from this investment by completing the second column in the table. Note: Throughout this problem, please round your answers to the nearest cent. Year 1 Dividends: Capital Gains: 69 $ 69 Year 2 Dividends: Capital Gains: $ $ Amount $ Taxes Owed $ $ 69 $ The total amount of investment income (pre-taxes) that Shen earned on this investment over the course of 2 years is $ The total amount that Shen pays in taxes on income from this investment income is $ Suppose Shen is in the 22% tax bracket. Compute the taxes Shen pays each year on dividends and capital gains from this investment by completing the second column in the table. Note: Throughout this problem, please round your answers to the nearest cent. Year 1 Dividends: Capital Gains: 69 $ 69 Year 2 Dividends: Capital Gains: $ $ Amount $ Taxes Owed $ $ 69 $ The total amount of investment income (pre-taxes) that Shen earned on this investment over the course of 2 years is $ The total amount that Shen pays in taxes on income from this investment income is $