The country of Aquilonia has a tax system identical to that of Canada. Suppose an Aquilonian bought a parcel of land for $10,000 in 1960 when the price index equalled 100. In 2019, the person sold the land for $100,000, and the price index equalled 500. If the person must pay 20 percent of any capital gain in taxes, what is the after-tax real capital gain (in 2019 dollars) on the land?      a. $72,000        b. $32,000        c. $6400        d. $62,000

Microeconomics: Private and Public Choice (MindTap Course List)
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Chapter14: Investment, The Capital Market, And The Wealth Of Nations
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The country of Aquilonia has a tax system identical to that of Canada. Suppose an Aquilonian bought a parcel of land for $10,000 in 1960 when the price index equalled 100. In 2019, the person sold the land for $100,000, and the price index equalled 500. If the person must pay 20 percent of any capital gain in taxes, what is the after-tax real capital gain (in 2019 dollars) on the land?

 

  
a. $72,000
 
 
  
b. $32,000
 
 
  
c. $6400
 
 
  
d. $62,000
 
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