Steve purchases some land for $30,000 . He maintains it, but makes no improvements to it. One year later he sells it for $32,000 . Stephanie puts $30,000 in a savings account that pays 6% interest. Steve has to pay the 50% capital gains tax, Stephanie is in the 35% tax bracket. The inflation rate was 2%. Who had the higher before-tax real gain and who had the higher after-tax real gain?
a. Steve had both the higher before-tax real gain and the higher after-tax real gain.
b. Steve had the higher before-tax real gain but Stephanie had the higher after-tax real gain.
c. Stephanie had the higher before-tax real gain but Steve had the higher after-tax real gain.
d. Stephanie had both the higher before-tax real gain and the higher after-tax real gain.
b
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