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Stock splits Nathan Detroit owns 400 shares of the food company General Mills, Inc., which he purchased during the recession in January 2009 for $35 per share. General Mills is regarded as a relatively safe company because it provides a basic product that consumers need in good and bad economic times. Nathan read in the Wall Street Journal that the company’s board of directors had voted to split the stock 2-for-1. In June 2010, just before the stock split, General Mills shares were trading for$75.14.
Answer the following questions about the impact of the stock split on his holdings and taxes. Nathan is in the 28% federal income tax bracket.
e. What is Nathan’s tax liability from the event?
Solution
VerifiedIn this final part of this task, we ought to determine Nathan's tax liabilities, knowing his federal income tax bracket.
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