Asked by Crystal Rivas on Jul 28, 2024
Verified
Fifteen years ago your parents purchased some land with the idea of selling it later to help pay your college expenses. They purchased the land for $100,000. They sold if for $180,000. During the time they held it the price level rose from 80 to 120. If your parents face a 25% tax rate, what was their real after-tax gain? (Hint: What's the real value of the land in current prices?)
Price Level
A gauge for the typical costs of goods and services across the economy.
Tax Rate
The tax rate is the percentage at which an individual or corporation is taxed, which can vary based on income level, type of income, or value of goods and services.
- Analyze the real net returns of investments, taking into account both taxation and inflation.
Verified Answer
BH
Learning Objectives
- Analyze the real net returns of investments, taking into account both taxation and inflation.