An investor sells an office property with a $125,000 capital gain. If long-term capital gains are taxed at 15%, how much tax is due on this gain?

An investor sells an office property with a $125,000 capital gain. If long-term capital gains are taxed at 15%, how much tax is due on this gain?

• A. $31,250
• B. $0
• C. $18,750
• D. $125,000

Answer: (C)

Long-term capital gains are taxed at a favorable rate, so you apply the given tax rate directly to the gain amount. Take the $125,000 gain and multiply by 0.15 (15%), which equals $18,750. That’s the tax due on the gain under the stated rate. In Florida, there’s no state income tax, so this figure represents the federal tax on the gain (assuming no other deductions or qualifiers).

Long-term capital gains are taxed at a favorable rate, so you apply the given tax rate directly to the gain amount. Take the $125,000 gain and multiply by 0.15 (15%), which equals $18,750. That’s the tax due on the gain under the stated rate. In Florida, there’s no state income tax, so this figure represents the federal tax on the gain (assuming no other deductions or qualifiers).