1. Three years ago, Adrian purchased 170 shares of stock in X Corp. for $30,090.
ID: 2563121 • Letter: 1
Question
1. Three years ago, Adrian purchased 170 shares of stock in X Corp. for $30,090. On December 30 of year 4, Adrian sells the 170 shares for $26,690 a. Assuming Adrian has no other capital gains or losses, how much of the loss is Adrian able to deduct on her year 4 tax return? b. Assume the same facts as in part (a), except that on January 20 of year 5, Adrian purchases 255 shares of X Corp. stock for $37,230. How much loss from the sale on December 30 of year 4 is deductible on Adrian’s year 4 tax return? What basis does Adrian take in the stock purchased on January 20 of year 5?
Explanation / Answer
she Adrian purchased 170 shares- $ 30,090
Adrian sales 170 shares- $ 26,690
So loss -$ 3400
Adrian realised 3400 long term capital loss on the sale of 170 shares.she can offset $3000 of the capital loss.The remain ing 400 of the capital loss is is carried forward identical.
Adrian has $3400 long term capital loss however she has subsequently purchase identical stock with in 61 days period therefore her loss is limited by the wash sales ruler.adrian purchased 225 shares. the loss is currently not recognised. The loss is added to basis of the new shares of the 225 new shares of stock is$ (37230+3400)=40,630.
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