47. George bought the following amounts of Stock A over the years: Stock A Stock A Stock A Date Purchased 11/21/1995 3/18/2001 5/22/2010 Number of Shares 1,000 500 750 Adjusted Basis $24,000 9,000 27,000 On October 12, 2021, he sold 1,200 of his shares of Stock A for $38 per share. a) How much gain/loss will George have to recognize if he uses the FIFO method of accounting for the shares sold? b) How much gain/loss will George have to recognize if he specifically identifies the shares to be sold by telling his broker to sell all 750 shares from the 5/22/2010 purchase and 450 shares from the 11/21/1995 purchase?

47. George bought the following amounts of Stock A over the years: Stock A Stock A Stock A Date Purchased 11/21/1995 3/18/2001 5/22/2010 Number of Shares 1,000 500 750 Adjusted Basis $24,000 9,000 27,000 On October 12, 2021, he sold 1,200 of his shares of Stock A for $38 per share. a) How much gain/loss will George have to recognize if he uses the FIFO method of accounting for the shares sold? b) How much gain/loss will George have to recognize if he specifically identifies the shares to be sold by telling his broker to sell all 750 shares from the 5/22/2010 purchase and 450 shares from the 11/21/1995 purchase?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Sadie sold 11 shares of stock to her brother, George, for $600 sixteen months ago. Sadie had purchased the stock for $800 two years earlier. If George sells the stock for $1,000 what is the amount and character of his recognized gain or loss in the current year?
Sam owns 1,500 shares of Eagle, Inc. stock that he purchased over 10 years ago for $80,000. Although the stock has a current market value of $52,000, Sam still views the stock as a solid long-term investment. He has sold other stock during the year with overall gains of $30,000, so he would like to sell the Eagle stock and offset the $28,000 loss against these gains—but somehow keep his Eagle investment. He has devised a plan to keep his Eagle investment by using funds in his traditional IRA to purchase 1,500 Eagle shares immediately after selling the shares he currently owns. Evaluate Sam’s treatment of these stock transactions. Can his plan work?
Nadine bought 100 shares of oak stock for $30 a share on april 30 2019 on july the 1st 2020 she noticed that the stock had increased in value to 35 a schare she decided to sell her share Nadine only other incomr for the year consists of 65000 in wages she will claim standard deduction when she filies her return . Nadine revenues from sales of stocj will increase her taxable income by 500 and this 500 will be taxed at a capital gsin rate of 15% 500 and the 500 will be taxed at her regular marginal tax rate of 22% 3500 and this 3500 will be tax at a capital gain rate of 20% 3500 and this will be taxed at her regular marginal rate of 22%
Assume, for purposes of this question only, that Susan acquired 2,000 shares of Hawk Corporation stock for $80,000 on March 31, 2014. On March 1, 2023, she sells 125 shares for $3,750. On March 22, 2023, she purchases 135 shares of Hawk Corporation stock for $4,725. a. What is Susan’s realized gain or loss from the sale on March 1, 2023? b. What is Susan’s recognized gain or loss from the sale on March 1, 2023? c. What is Susan’s basis in the 135 shares purchased on March 22, 2023? d. When does Susan’s holding period begin for the 135 shares
On December 28, 2020, Kramer sells 150 shares of Lavender, Inc. stock for $77,000. On January 10, 2021, he purchases 100 shares of the same stock for $82,000. a. Assuming that Kramer's adjusted basis for the stock sold is $65,000, what is his recognized gain or loss? Kramer's recognized gain is $12,000. What is his basis for the new shares? His basis for the new shares is $82,000. b. Assuming that Kramer's adjusted basis for the stock sold is $89,000, what is his recognized gain or loss? Kramer's recognized loss is $_________. (Side note: 12,000 and -12,000 is wrong) What is his basis for the new shares? His basis for the new shares is $90,000.
On December 28, 2020, Kramer sells 150 shares of Lavender, Inc. stock for $77,000. On January 10, 2021, he purchases 100 shares of the same stock for $82,000. a. Assuming that Kramer's adjusted basis for the stock sold is $65,000, what is his recognized gain or loss? Kramer's recognized _______ is $_________. What is his basis for the new shares? His basis for the new shares is $________. b. Assuming that Kramer's adjusted basis for the stock sold is $89,000, what is his recognized gain or loss? Kramer's recognized _______ is $_________. What is his basis for the new shares? His basis for the new shares is $________. c. Advise Kramer on how he can avoid any negative tax consequences encountered in part (b). He could repurchase _________.
Dennis sells short 125 shares of ARC stock at $104 per share on January 15, 2021. He buys 250 shares of ARC stock on April 1, 2021, at $130 per share. On May 2, 2021, he closes the short sale by delivering 125 of the shares purchased on April 1. a. What are the amount and nature of the loss upon closing the short sale? Dennis has short-term capital loss in the amount of $fill in the blank . b. When does the holding period for the remaining shares begin? The holding period for the remaining shares begins on May 2. c. If Dennis sells (at $143 per share) the remaining 125 shares on January 20, 2022, what will be the nature of his gain or loss? Dennis has short-term capital gain in the amount of $fill in the blank .
Chaz recently received 2,190 shares of restricted stock from his employer, Fahrner Corporation, when the share price was $11 per share. Char's restricted shares vested three years later when the market price was $15. Chaz held the shares for a little more than a year and sold them when the market price was $13. What is the amount of Chaz's gain or loss on the sale? Multiple Choice $2190 loss so $4.380 gein $4.380 loss
Sue received 50 shares of Zoll Industry stock from her Uncle Dave for a graduation present. Dave purchased the stock in 1986 at $25 per share. The stock was worth $60 per share when Sue graduated. What is Sue’s basis in the stock? Group of answer choices $1,250 $2,500 $1,500 $3,000
Dennis sells short 475 shares of ARC stock at $112 per share on January 15, 2019. He buys 950 shares of ARC stock on April 1, 2019, at $140 per share. On May 2, 2019, Dennis closes the short sale by delivering 475 of the shares purchased on April 1. a. What are the amount and nature of the loss upon closing the short sale? Dennis has loss in the amount of $ b. When does the holding period for the remaining shares begin? The holding period for the remaining shares begins on c. If Dennis sells (at $154 per share) the remaining 475 shares on January 20, 2020, what will be the nature of his gain or loss? Dennis has in the amount of $
On September 6, 2016, Andrew, who is married, purchased Allstar Corporation stock for $220,000 from the corporation. The Allstar Corporation’s stock qualified as Section 1244 stock. On November 20, 2019, Andrew sold the Allstar stock for $100,000. How should Andrew report his realized gain or loss on the sale of the Allstar Corporation stock? Question 2 options: a) Andrew realized a $120,000 long term capital loss. b) Andrew realized a $50,000 Section 1244 ordinary loss and a $70,000 long term capital loss. c) Andrew realized a $100,000 Section 1244 ordinary loss and a $20,000 long term capital loss. d) Andrew realized a $120,000 Section 1244 ordinary loss.
3. (gift basis) Steve received 100 shares of FZL stock as a gift from his grandfather on February 25, 2023. His grandfather purchased the stock for $13,000 on April 20, 2021. a. What is Steve's initial basis and holding period for the stock if the stock's FMV on the date of the gift was $14,000? b. What is Steve's initial basis and holding period for the stock if the stock's FMV on the date of the gift was $10,000? c. What is the amount and character of Steve's recognized gain (loss) if he sells the stock in part "b" on August 15, 2023, at the following prices? Selling price Basis Gain (loss) $13,800 $9,600 $12,100 Holding period Character