# The Tax Benefits of Holding on to Stocks - Teach

```Name ___________________________
Date ____________________
The Tax Benefits of Holding on to
Stocks
In the U.S. if you hold on to a stock for over 12
months, the amount you earn on the stock is
subject to a discounted tax rate. This is referred
to as a capital gains tax rate. In the most
commonly filed tax bracket the rate of tax that
you pay decreases from 25% to 15%, if you
hold the stock for greater than 1 year.
For example: Assume that you are in the 25% tax
bracket. You buy 400 shares of XYZ Corp. at \$13.84.
The current trading sale price is at \$19.74.
Total purchase price = 400 x \$13.84 = \$5,536.00
Total sale price = 400 x \$19.74 = \$7,896.00
Total profit = \$7,896.00 - \$5,536.00 = \$2,360
Taxes on profit (normal rate) = \$2,360.00 x 0.25 = \$590
Taxes on profit (capital gain rate) = \$2,360.00 x 0.15 = \$354
Holding stock for 1 year provides \$186 dollars more.
Directions: Calculate the amount of extra money you
would have earned by holding on to the following stocks
for greater than a year. Assume that you are in the 25%
tax bracket for all cases.
1. 600 shares of Apple bought at \$83.62 a share. You sold
those shares at \$235.93 a share.
2. 1,500 shares of Verizon Wireless bought at \$24.91 a
share. You sold those shares at \$42.67 a share.
3. 14,500 shares of Google bought at \$174.52 a share.
You sold those shares at \$289.34 a share.
&copy; This stock market worksheet is from www.teach-nology.com
Name ___________________________
Date ____________________
1. \$9,138.60
2. \$2,664.00
3. \$166,489.00
&copy; This stock market worksheet is from www.teach-nology.com
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