Maya Expects to Report About $2 Million of AGI and $1.7

question 333

Multiple Choice

Maya expects to report about $2 million of AGI and $1.7 million of taxable income. Her AGI is composed of $1.25 million of salary, and the balance is investment income. Maya is thinking about selling some stock before year- end. She purchased the stock three years ago and expects to recognize a $500,000 gain. How much federal tax will she pay in total on the stock gain?

• A) $75,000
• B) $119,000
• C) $100,000
• D) $185,000

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Definitions:

Note Payable

A written promise to pay a specific sum of money at a future date, typically including interest payments.

Promissory Note

A financial instrument in which one party (the issuer) promises in writing to pay a determinate sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms.

Prepaid Expense

Payments made beforehand for products or services that will be provided later on.

Prepaid Expense

Expenses paid in advance for goods or services to be received in the future, recorded as an asset on the balance sheet until consumed.