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  3. mike borrowed $500,000 and used the full amount to

Mike borrowed $500,000 and used the full amount to acquire shares in a qualified small...

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Accounting

Mike borrowed $500,000 and used the full amount to acquire shares in a qualified small business corporation. Over the next few years, he deducted $100,000 in interest expenses related to the investment loan. This year, Mike sold the business for $950,000-he has not previously sold any type of qualified capital property. Assuming a lifetime capital gains exemption of $883,384, what is the MINIMUM amount on which Mike must pay tax following the disposition of his business?

a) $125,000

b) $225,000

c) $0

d) $100,000

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