28Jan 2022 by
You recently received the following e-mail from a client and friend:
Hey Berkeley College Accounting Major,
I cannot believe it is almost year end! Only a few days before it’s 2021.
As you recall, I was lucky enough to win big at the casino back on New Year’s Day earlier this year (thanks for celebrating with me). I took the $3,000 I won and bought 100 shares of stock in that cool new smartphone app company, TriviaAddiction. I just love playing that game. Anyway, the stock has done well, and I am thinking of selling before year end now that the price has reached $240 per share. Since you are my tax adviser, I thought I’d ask a couple of questions:
Is there any reason to wait and sell later?
If I don’t sell, the price might go down (TriviaMaster seems to be replacing TriviaAddiction as the “hot” new game). I’m thinking the price might be as low as $220 by early next year.
My taxable income this year and next year is expected to be $38,500 (not including the stock sale). I think that puts me in the 12% tax bracket? Any suggestions on what I should do?
Please advise your friend Sue and addressing her questions in your initial post. Be certain to include estimates of the different after-tax outcomes she is suggesting. Sue is a single taxpayer and not a tax expert and so your language should reflect her limited understanding of tax law and avoid technical jargon. Although Sue is your friend, she is also a client, therefore, the information presented in your post should reflect your professionalism and expertise in the matters concerning her.
Please be sure to include at least APA formatted references for your initial post. Always begin with your eText for a first source of information. This means that your eText will always be included as a reference in each initial post for each discussion board this semester. Also, please be sure to reference the IRS web address used.
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