Suppose the capital gains tax is 28 percent and you purchased a house ten years ago for $80,000. If you sold the house today you would get $140,000. Your tax liability would be:A. indeterminate without knowing the inflation rate.
B. $16,800.
C. $39,200.
D. indeterminate without knowing the personal income tax rate.

Question

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Respuesta :

DeniceSandidge DeniceSandidge · Answer 1 · 2020-03-15T11:23:41+01:00

Answer:

correct option is B. $16,800.

Explanation:

given data

capital gains tax = 28 percent

time period = 10 year

purchased a house = $80,000

sold house today = $140,000

solution

we get here Capital gain that is getting by the subtracting purchase price from the selling price

Capital gain = selling price - purchase price .............1

put here value and we get

Capital gain = $140,000 - $80,000

Capital gain = $60,000

so here we get Capital Gain Tax Amount that is express as

Capital Gain Tax Amount = Capital Gain × tax rate ...................2

Capital Gain Tax Amount = $60,000 × 28%

Capital Gain Tax Amount = $16,800

so tax liability would be $16,800

correct option is B. $16,800.