An Investor Bought 100 Shares of a REIT for $54

question 17

Essay

An investor bought 100 shares of a REIT for $54 a share and two years later sold the shares for $62. The REIT annually distributed $4.00 per share ($400) consisting of $2.00 return of capital $200), $1.20 ($120) in income and $0.80 ($80) in long-term capital gains. The investor's income tax bracket is 30%. The long-term capital gains tax rate is 15 percent. What is the investor's second year's tax obligation SOLUTIONS TO THE PROBLEMS

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Definitions:

Accounts Receivable

The money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Credit to Cash

A transfer or accounting entry that increases the cash balance while simultaneously increasing a corresponding credit account.

Art Studio

A creative space where artists create, display, and sometimes sell their artworks.

Furniture

An asset category in accounting that refers to movable articles intended to support various human activities such as seating and sleeping or to hold objects at a convenient height.