Kendra’s income put her in the top tax bracket (35%) last year. During the same year, she earned $760 in dividends and $490 in coupons on a corporate bond. Three years ago, she purchased a common stock for $835. She sold the same stock last year for $1180. What is the total Kendra will pay in taxes on last year’s investments?

Question

rockinhood · Answer

http://prntscr.com/b2dvum

sleepyjess · Answer

Let's separate out all of the information first:
$760 in dividends
$490 in coupons on a corporate bond
$1180 from selling the stock

sleepyjess · Answer

The $760 in dividends is taxed at 15% since she's in the top four brackets

sleepyjess · Answer

The $490 from the corporate bond will be taxed at 35% because that is her tax bracket

sleepyjess · Answer

And the $1180 will be taxed at 15% as dividend income since she held it long term

rockinhood · Answer

114, 171.5 , 177?

sleepyjess · Answer

Yep :)

rockinhood · Answer

What's the next step?

rockinhood · Answer

The answer should come out to 337.25$ I think

sleepyjess · Answer

If it gave how much she made being taxed at 35%, calculate that, if not, then just add together the 3 values we found

rockinhood · Answer

It said she sold a stock and made 345$ (1180 - 835)

rockinhood · Answer

I just didn't know if that affects the answer in any way.

rockinhood · Answer

@ganeshie8

rockinhood · Answer

@knov

knov · Answer

What is the total Kendra will pay in taxes on last year’s investments?

rockinhood · Answer

It should come out to be 337.25$

knov · Answer

what part you don't understand ?

rockinhood · Answer

I don't know how to achieve the right answer with what I was given, I may be calculating wrong but I'm doing what jess said to do

knov · Answer

Okay, i re-read your question. i think 345 should be tasked at 15% instead 1180.

rockinhood · Answer

Yeah I get what I want from that

rockinhood · Answer

(There was a variation where it was multiple choice)