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George bought the following amounts of Stock A over the years:(Loss amounts should be indicated with a minus sign
George bought the following amounts of Stock A over the years:(Loss amounts should be indicated with a minus sign.)
| Date Purchased | Number of Shares | Adjusted Basis | ||
| Stock A | 11/21/1993 | 1,030 | $ | 24,720 |
| Stock A | 3/18/1999 | 515 | 9,270 | |
| Stock A | 5/22/2008 | 780 | 28,080 | |
On October 12, 2019, he sold 1,245 of his shares of Stock A for $38 per share.
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 780 shares from the 5/22/2008 purchase and 465 shares from the 11/21/1993 purchase?
Expert Solution
| b | ||
| Cost of 780 shares | 28080 | |
| Cost of 465 shares | 11160 | =24720/1030*465 |
| Adjusted basis of stock | 39240 | |
| Amount realized from sale | 47310 | =1245*38 |
| Less: Adjusted basis of stock | 39240 | |
| Gain | 8070 |
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