To determine which investor will have the greatest after-tax amount, we need to consider the different types of income and the tax rates that apply to each:

1. Investor A: Received $1,500 in qualified dividend distribution. Qualified dividends are typically taxed at the long-term capital gains rate, which is 15% for most taxpayers with an income of $100,000.

2. Investor B: Received $1,500 in interest income from a certificate of deposit. Interest income is taxed at ordinary income tax rates. For a taxable income of $100,000, the federal tax rate would generally be 24%.

3. Investor C: Realized a $1,500 long-term capital gain. Long-term capital gains are taxed at the same rate as qualified dividends, which is 15% for most taxpayers in this income range.

Tax Calculation:

• Investor A (qualified dividend): $1,500 \times 0.15 = 225 \, (\text{tax})$ $1,500 - 225 = 1,275 \, (\text{after-tax amount})$

• Investor B (interest income): $1,500 \times 0.24 = 360 \, (\text{tax})$ $1,500 - 360 = 1,140 \, (\text{after-tax amount})$

• Investor C (long-term capital gain): $1,500 \times 0.15 = 225 \, (\text{tax})$ $1,500 - 225 = 1,275 \, (\text{after-tax amount})$

Comparison of After-Tax Amounts:

• Investor A: $1,275
• Investor B: $1,140
• Investor C: $1,275

Conclusion:

Investors A and C will have the greatest after-tax amount of $1,275, so the correct answer is C. Investors A and C.

Would you like further details or have any questions?

Here are five related questions:

1. How are qualified dividends different from non-qualified dividends?
2. What determines the long-term capital gains tax rate for different income levels?
3. How would state taxes impact the calculations in this scenario?
4. What are the tax implications of short-term capital gains compared to long-term capital gains?
5. How would the tax result differ if the investors had lower total taxable income?

Tip: Always check whether your dividends are qualified or non-qualified, as the tax rates can be significantly different!