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 In 2018, Mr

Taxation Apr 19, 2021

 In 2018, Mr. Dale paid $37,800 for 2,700 shares of GKL Mutual Fund and elected to reinvest his year-end dividends in additional points shares. In 2018 and 2019, he received Form 1099s reporting the following: 
             Dividends            Shares             Price per           Total Shares

            Reinvested          Purchased         Share                 Owned 
2018      $3,915                   326               $12.009                3,026

2019        4,539                   364                 12.470                 3,390 
Assume the taxable year is 2020. 
Required:

a) If Mr. Dale sells his 3,390 shares for $17 per share, compute his recognized gain.

b) If he sells only 750 shares for $17 per share and uses the FIFO method to determine basis, compute his recognized gain.

c) If he sells only 750 shares for $17 per share and uses the average basis method, compute his recognized gain. 
 

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