Three years ago your client had purchased 500 shares of GE for her investment portfolio… As you know, GE stock has taken a beating, so much so that it was kicked out of the DJIA two years ago. Your client had bought at $40 per share. Last December 10th she sold all 500 shares at $11. On December 31st she bought another 500 shares at $11.15. Her thinking – before you set her straight – was that she could use the $29 per share loss to offset (for FIT purposes) some unrelated capital gains she’d had earlier in 2019 while putting GE right back into her portfolio be-cause “I know in my heart that it’s going to be a big winner in the long run – just a matter of time!” Your client was understandably upset when you explained that she would not be able to use that loss on her 2019 tax return after all. But then she did feel a little better when you explained that her tax basis in her (new) 500 shares of GE is not $11.15 per share, but rather $___ per share.
Three years ago your client had purchased 500 shares of GE for her investment portfolio…
As you know, GE stock has taken a beating, so much so that it was kicked out of the DJIA two years ago. Your client had bought at $40 per share. Last December 10th she sold all 500 shares at $11. On December 31st she bought another 500 shares at $11.15. Her thinking – before you set her straight – was that she could use the $29 per share loss to offset (for FIT purposes) some unrelated
Your client was understandably upset when you explained that she would not be able to use that loss on her 2019 tax return after all. But then she did feel a little better when you explained that her tax basis in her (new) 500 shares of GE is not $11.15 per share, but rather $___ per share.
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