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an investor bought investment property at the beach for $35,000 per acre. twenty years later she sold the 100-acre lot to a developer for a profit, and paid $1.05 million in taxes as a result of the sale. if capital gains are taxed at 15% and her marginal tax bracket is 35%, what was the price paid by the developer for the lot?

Respuesta :

The price paid by the developer for the lot is $10.5 million.

What is capital gain?

The profit made from the selling of an asset, such as stocks, bonds, or real estate, is known as a capital gain. When an asset's selling price is higher than its original acquisition price, a capital gain is realized.

Capital gain tax is levied on gain from sale . We have been given the tax amount paid for the 100 acre lot.  

Tax amount = Gain on sale * Capital gain rate

1.05 million =Gain on sale *0.15

Gain = 1.05/.15

Gain = $ 7 million

Cost = 35000*100

= 3,500,00

or 3.5 million

Price paid by developer = Cost + gain on sale

=3.5+7

= 10.5 million

Therefore, price paid by developer is 10.5 million.

To learn more about capital gain refer here

https://brainly.com/question/24084696#

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