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NEW QUESTION: 3
Tex Payor purchased 1,000 shares of Stocks4U, a mutual fund with a 5% front-end load, on February
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What were the tax consequences for Tex?
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B. Tex must pay taxes on $45,000, which will be taxed at a preferential long -term capital gain rate under current tax law.
C. Tex must pay taxes on $14,600, which will be taxed at a preferential long-term capital gain rate under current tax law.
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Answer: D
Explanation:
Explanation/Reference:
Explanation: If Tex purchased 1,000 shares of Stocks4U at its offer price of $32 on February 26th, and sold his shares the following year on March15th for $45 a share, he must pay taxes on $13,000, which will be taxed at a preferential long-term capital gain rate under current tax law.
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