Kelly purchased ten shares of Gentech stock for $200 in year 1 and sold all the shares in year 2 for $220 a share. Between year 1 and year 2, the price level increased by 5%. The tax on capital gains is 50%. If the capital gains tax is on nominal gains, calculate how much tax Sally pays on her gain. Calculate Kelly's capital gains if the tax is on real gains.
3 answers
See my response to Sally above.
Sorry. See my respose to Sarah above.
95