...in year 2 for $400...? I'm stuck on this question in my economics homework can anyone please help?
Thanks, Jenna
Sally purchased one share of Stryker stock for $200 in year 1 and sold that share in year 2 for $400. The inflation rate between year 1 and year 2 was 50%. If the capital gains tax is 50%, what’s Sally’s after tax-real capital gain if the tax is on nominal gains? What is it if the tax is on real gains?
A. $0, $50
B. $50, $0
C. $100, $150
D. $100, $150
Thanks, Jenna
Sally purchased one share of Stryker stock for $200 in year 1 and sold that share in year 2 for $400. The inflation rate between year 1 and year 2 was 50%. If the capital gains tax is 50%, what’s Sally’s after tax-real capital gain if the tax is on nominal gains? What is it if the tax is on real gains?
A. $0, $50
B. $50, $0
C. $100, $150
D. $100, $150