Stan owns 1,500 shares of Red Corporation common stock which he purchased in 2011 for $30,000. On 3-30-14 he purchased an additional 500 shares for $7,000. On 4-20-14 he sells 1,000 of the original shares for $11,000. On 5-15-14 he purchases 200 shares of Red stock for $4,000. What is Stan's recognized loss as a result of the sale of the stock and what is the basis of the shares purchased on 3-30-14, respectively ?
Stan owns 1,500 shares of Red Corporation common stock which he purchased in 2011 for $30,000. On 3-30-14 he purchased an additional 500 shares for $7,000. On 4-20-14 he sells 1,000 of the original shares for $11,000. On 5-15-14 he purchases 200 shares of Red stock for $4,000. What is Stan's recognized loss as a result of the sale of the stock and what is the basis of the shares purchased on 3-30-14, respectively ?
Chapter9: Acquisitions Of Property
Section: Chapter Questions
Problem 68P
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Stan owns 1,500 shares of Red Corporation common stock which he purchased in 2011 for $30,000. On 3-30-14 he purchased an additional 500 shares for $7,000. On 4-20-14 he sells 1,000 of the original shares for $11,000. On 5-15-14 he purchases 200 shares of Red stock for $4,000. What is Stan's recognized loss as a result of the sale of the stock and what is the basis of the shares purchased on 3-30-14, respectively ?
a. $6,300 loss ; $5,800 basis
b. $5,700 loss ; $17,300 basis
c. $2,700 loss ; $5,800 basis
d. $2,700 loss ; $11,500 basis
e. None of the answers provided is correct
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