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1. Your uncle Bob owned 5,000 shares of Apple Corp that he purchased for $75,000 in 1999. He recently passed away and you inherited the shares. On the date of his death the shares were worth $600,000. His estate paid $10 million in estate tax and $200,000 was attributable to the Apple stock. 6 months after you inherit the stock you sell it for $625,000. What is the amount of gain/loss on the transaction? Is the gain/loss long term or short- term?

1. Your uncle Bob owned 5,000 shares of Apple Corp that he purchased for $75,000 in 1999. He recently passed away and you inherited the shares. On the date of his death the shares were worth $600,000. His estate paid $10 million in estate tax and $200,000 was attributable to the Apple stock. 6 months after you inherit the stock you sell it for $625,000. What is the amount of gain/loss on the transaction? Is the gain/loss long term or short- term?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. Your uncle Bob owned 5,000 shares of Apple Corp that he purchased for $75,000 in 1999. He recently passed away and you inherited the shares. On the date of his death the shares were worth $600,000. His estate paid $10 million in estate tax and $200,000 was attributable to the Apple stock. 6 months after you inherit the stock you sell it for $625,000. What is the amount of gain/loss on the transaction? Is the gain/loss long-term or short- term?
Transcribed Image Text:1. Your uncle Bob owned 5,000 shares of Apple Corp that he purchased for $75,000 in 1999. He recently passed away and you inherited the shares. On the date of his death the shares were worth $600,000. His estate paid $10 million in estate tax and $200,000 was attributable to the Apple stock. 6 months after you inherit the stock you sell it for $625,000. What is the amount of gain/loss on the transaction? Is the gain/loss long-term or short- term?
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