Question

4. Cecelia is an avid art collector who owns many original works of art. Recently, she decided to sell an oil painting by Norman Rockwell. The buyer paid $500,000 for the painting. Since Cecelia had paid just $350,000 for the painting, she made a profit, or capital gain, on the sale. Determine Cecelia’s capital gain by subtracting $350,000 from $500,000. If the capital gain tax is 15 percent, you would calculate the tax bill by multiplying her capital gain by 0.15. How much tax did Cecelia owe?

Answer 1

Hi there

Capital gain
500,000−350,000
=150,000
Capital gain tax
150,000×0.15
=22,500

Hope it helps