Juan sells 300 shares of pqr stock on March 15 2016 for $20 a share he acquired
ID: 2572623 • Letter: J
Question
Juan sells 300 shares of pqr stock on March 15 2016 for $20 a share he acquired the stock over a number of years. his grandfather HOMEWORK 1: What is Juan's gain or loss? Juan sells 300 shares of PQR stock on March 15, 2016 for $20 a share He acquired the stock over a number of years. His grandfather left him 50 shares worth $1,500 when he died on August 31, 2012. His grandfather had purchased the stock for $5 a share on June 6, 1987 Juan's mother gave him 100 shares for his birthday on March 16, 2012 when the FMV was $28 a share. She purchased the stock on May 1, 1994 for $12 a share. On February 2, 2013 PQR announced a two-for-one split.Explanation / Answer
BASIS: 50 SHARES FROM GRANDFATHER (FMV at death) $1,500
100 SHARES FROM MOTHER (100 x $12) $1,200
BASIS $2,700
SPLIT GAVE HIM 300 SHARES (TWO FOR ONE SPLIT)
SOLD 300 SHARES FOR $6,000 - $2,700 BASIS = $3,300 Gain Ans.
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