Problem 14-39 (Algorithmic) (LO. 1, 2, 3) Mahan purchases 1,000 shares of Bluebird Corporation stock on October 3, 2021, for $205,000. On December 12, 2021, Mahan purchases an additional 750 shares of Bluebird stock for $143,500. According to market quotations, Bluebird stock is selling for $205 per share on 12/31/21. Mahan sells 500 shares of Bluebird stock on March 1, 2022, for $114,800. a. What is the adjusted basis of Mahan's Bluebird stock on December 31, 2021? 348,500 Feedback Check My Work Cost identification problems are frequently encountered in securities transactions. For example, the Regulations require that the taxpayer adequately identify the particular stock that has been sold (specific identification). b. What is Mahan's recognized gain or loss from the sale of Bluebird stock on March 1, 2022, assuming the shares sold are from the shares purchased on December 12, 2021? In your computations, round the per share amount to the nearest whole dollar and use the rounded amount in subsequent computations. Mahan's recognized gain is $ 19,133 c. What is Mahan's recognized gain or loss from the sale of Bluebird stock on March 1, 2022, assuming Mahan cannot adequately identify the shares sold? Mahan has a recognized gain of $ 12,300
Problem 14-39 (Algorithmic) (LO. 1, 2, 3) Mahan purchases 1,000 shares of Bluebird Corporation stock on October 3, 2021, for $205,000. On December 12, 2021, Mahan purchases an additional 750 shares of Bluebird stock for $143,500. According to market quotations, Bluebird stock is selling for $205 per share on 12/31/21. Mahan sells 500 shares of Bluebird stock on March 1, 2022, for $114,800. a. What is the adjusted basis of Mahan's Bluebird stock on December 31, 2021? 348,500 Feedback Check My Work Cost identification problems are frequently encountered in securities transactions. For example, the Regulations require that the taxpayer adequately identify the particular stock that has been sold (specific identification). b. What is Mahan's recognized gain or loss from the sale of Bluebird stock on March 1, 2022, assuming the shares sold are from the shares purchased on December 12, 2021? In your computations, round the per share amount to the nearest whole dollar and use the rounded amount in subsequent computations. Mahan's recognized gain is $ 19,133 c. What is Mahan's recognized gain or loss from the sale of Bluebird stock on March 1, 2022, assuming Mahan cannot adequately identify the shares sold? Mahan has a recognized gain of $ 12,300
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Problem 14-39 (Algorithmic) (LO. 1, 2, 3)
Mahan purchases 1,000 shares of Bluebird Corporation stock on October 3, 2021, for $205,000. On December 12, 2021, Mahan purchases
an additional 750 shares of Bluebird stock for $143,500. According to market quotations, Bluebird stock is selling for $205 per share on
12/31/21. Mahan sells 500 shares of Bluebird stock on March 1, 2022, for $114,800.
a. What is the adjusted basis of Mahan's Bluebird stock on December 31, 2021?
348,500
Feedback
Check My Work
Cost identification problems are frequently encountered in securities transactions.
For example, the Regulations require that the taxpayer adequately identify the particular stock that has been sold (specific identification).
b. What is Mahan's recognized gain or loss from the sale of Bluebird stock on March 1, 2022, assuming the shares sold are from the shares
purchased on December 12, 2021? In your computations, round the per share amount to the nearest whole dollar and use the
rounded amount in subsequent computations.
Mahan's recognized gain
is $
19,133
c. What is Mahan's recognized gain or loss from the sale of Bluebird stock on March 1, 2022, assuming Mahan cannot adequately identify
the shares sold?
Mahan has a recognized gain
of $
12,300
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