Pablo,a Sole Proprietor,sold Stock Held as an Investment for a $40,000

question 67

Multiple Choice

Pablo,a sole proprietor,sold stock held as an investment for a $40,000 long-term capital gain.Pablo's marginal tax rate is 33%.Loon Corporation,a C corporation,sold stock held as an investment for a $40,000 long-term capital gain.Loon's marginal tax rate is 35%.What tax rates are applicable to these capital gains?

• A)15% rate applies to Pablo and 35% rate applies to Loon.
• B)15% rate applies to Loon and 33% rate applies to Pablo.
• C)35% rate applies to Loon and 33% rate applies to Pablo.
• D)15% rate applies to both Pablo and Loon.
• E)None of the above.

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Definitions:

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A political term denoting the practice of exchanging favors, especially in legislative contexts, but can also refer to reciprocal arrangements in other areas.

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