Adam Purchased Stock in 2006 for $100,000

question 107

Essay

Adam purchased stock in 2006 for $100,000.He is considering selling it in 2015.It is currently worth $2,100,000 so he would realize a $2,000,000 gain.Adam is in the top tax bracket.Determine the taxes due under the following independent situations (ignore any additional Medicare taxes on investment income):
(a)Adam sells the stock,and no special circumstances apply.
(b)The stock is qualified small business corporation stock.
(c)The stock is qualified small business corporation stock.Within 60 days Adam invests $2,500,000 in new qualifying small business corporation stock.
(d)The stock is qualified small business corporation stock.Within 60 days Adam invests $2,000,000 in new qualifying small business corporation stock.

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Definitions:

McDonald's

A global chain of fast-food restaurants known for its burgers, fries, and breakfast items, characterized by its widespread presence and well-known brand.

Economic Espionage Act

is a United States federal law that criminalizes the theft or misappropriation of trade secrets with the intent of benefiting a foreign power.

Federal Crime

Illegal activities that violate federal laws and are prosecuted by the federal government.

Trade Secrets

Confidential business information that provides an enterprise with a competitive edge and is protected from disclosure.