For B) the answer I got is $16,595 from $17,250-$457.88-$197.10 I taxed the capi

ID: 2430221 • Letter: F

Question

For B) the answer I got is $16,595 from $17,250-$457.88-$197.10 I taxed the capital gains at 20.35%, the dividends are grossed up by 38% with eligible dividend tax at 21.64%. Not sure if my answer is correct though. Use the 2017 rates. All help is appreciated for b) and c). : Donna works in BC as a security analyst. Her salary for 2017 was $130,000. In 2014, she bought 1500 shares of a large public company at $10/share on which she received dividends of $0.44 per share. At the end of 2017, she sold the 1500 shares at $11.50. A) What is Donna's after-tax proceeds on the sale of the shares? B) What is the after-tax rate of return on the company investment? (annualized)

Explanation / Answer

Tax on Above Income

Tax

Salary Income

130000

0 to 38898

7802.939

38898

38898 to 45916

(45916-38898)*22.70%

1593.086

12018

over 45916 to 77797

(77797-45916)*28.20%

8990.442

31881

over 77797 to 89320

(89320- 77797)*31%

3572.13

11523

over 89320 to 91831

(91831-89320)*32.79%

823.3569

2511

over 91831 to 108460

(108460-91831)*38.29%

6367.244

16629

over 108460 to 142353

(130000-91831)*40.70%

8766.78

21540

Total

37915.98

135000

Capital Gain

(11.40-10)*1500

2100

210.63

Dividend

(0.44*1500)

660

-45.144

Total Tax to be paid in 2017

38081.46