3 C apital gains have additional tax advantages under the cu

3. C apital gains have additional tax advantages under the current tax system. If Larry bought a stock portfolio for $3,000 and sold it the day before he died when it was valued at $10,000. How much capital gains income would be taxed? (2 points) a. What if Larry did not sell the portfolio and instead his child sells the portfolio the day after he dies. How much capital gains income would be taxed? 02 points) b. Do you believe that the US handles this situation correctly (the one in \"a\" and b\" Explain. (4 points) c.

Solution

1. Capital gain of $ 10000-$ 3000 = $ 7000 would be taxed

2. Capital gain of $ 7000 would be taxed upon the deceased legal hiers and return of the deceased shall be filled by them taking into account all the other incomes of the deceased.

3. Yes, I believe the USA handles situation correctly for certail reasons like

- It would not lead to loss of revenue for state

- Deceased would pay tax from the assets he inhereted only

- This will stop some malicious tax planning by individuals