Gilberto Invested in a Mid-Size Local Company with Gross Assets

question 28

Multiple Choice

Gilberto invested in a mid-size local company with gross assets of $16,000,000. Gilberto purchased 1,000 shares for $48,000 in 1999. In 2015, Gilberto sold the stock for $78,000. How is the gain treated for tax purposes?

• A) $30,000 capital gain, taxed at preferential rates.
• B) $15,000 excluded from gross income under Section 1202 with the remaining gain recognized and taxed at regular tax rates.
• C) $15,000 excluded from gross income under Section 1202 and $15,000 taxed at 28%.
• D)$15,000 excluded from gross income under Section 1202 and $15,000 taxed at preferential rates.

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Definitions:

Street Smarts

The experience and knowledge necessary to deal with the potential difficulties or dangers of life in urban environments.

Critical Care

Specialized healthcare provision for patients experiencing life-threatening injuries or illnesses, requiring extensive monitoring and support from specialized medical staff and equipment.

Multiple Requests

The occurrence of several demands or enquiries made simultaneously or in a short period of time.