SOLUTION: Tom buys $20,000 worth of stock, and sells it eight months later for $28,000. If he is required to pay 15% capital gains tax on his profits, how much tax will he pay?

SOLUTION: Tom buys $20,000 worth of stock, and sells it eight months later for $28,000. If he is required to pay 15% capital gains tax on his profits, how much tax will he pay?

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Question 193438: Tom buys $20,000 worth of stock, and sells it eight months later for $28,000. If he is required to pay 15% capital gains tax on his profits, how much tax will he pay?
Answer by orca(409) (Show Source): You can put this solution on YOUR website!
Note that the capital gain tax = profit*rate
The profit = 28,000 - 20,000 = 8,000
The tax to be paid = 8,000*15% = 1,200

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