Adam Purchased Stock in 2006 for $100,000

question 63

Essay

Adam purchased stock in 2006 for $100,000.He is considering selling it in 2017.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.

---

Definitions:

Object Permanence

The understanding that objects continue to exist even when they cannot be observed (seen, heard, touched, smelled or sensed in any way).

Jean Piaget

A Swiss psychologist known for his pioneering work in child development and his theory of cognitive development.

Legacy

Something handed down from the past, such as property, traditions, or reputation, influencing the present and future.

Habituation Study

Research method that examines how repeated exposure to a stimulus decreases individuals' responses to it over time.