80.2K

Verified Solution

Link Copied!

Green, an individual taxpayer who is not a day trader, has requested assistance from a CPA to calculate Year 2 gains and/or losses on the sale of various shares of stock. For each of the following transactions, calculate the correct gain or loss. Brokerage commissions are included in the figures below. Enter the appropriate amounts in the designated cells below. Indicate losses by using a leading minus (-) sign. If no entry is necessary or the answer is zero, enter a zero (0).

Year 2 transactions	Amount of gain or loss
1. Sold 200 shares of X Corp. stock at $14 per share. Green received the 200 shares as a gift from his brother 3 years ago, when the shares had a fair market value of $10 per share. Green's brother purchased the stock for $16 per share.
2. Sold 200 shares of Y Corp. stock at $22 per share. Green received the 200 shares as a gift from his brother 3 years ago, when the shares had a fair market value of $26 per share. Green's brother purchased the stock for $16 per share.
3. Sold 450 shares of Z Corp. stock at $40 per share. Green received the 450 shares from his aunt's estate as a bequest. The fair market value of the stock at the date of his aunt's death was $32 per share and did not change in the subsequent year. His aunt originally purchased the stock for $20 per share.
4. Sold 1,225 shares of ABC Corp. stock at $9 per share. Green purchased 600 shares several years ago at $30 per share. Three years ago, when the stock price was $21, there was a 2-for-1 stock split. Two years ago, when the stock price was $25, there was a 3-for-2 stock split. No other shares were sold by Green prior to Year 2.
5. Sold 500 shares of XYZ Corp. stock at $20 per share. Green purchased these shares 2 years prior at $22 per share. Three weeks subsequent to the sale, Green purchased 100 shares of XYZ stock at $18 per share.
6. Sold 1,600 shares of BX Corp. stock at $4 per share. Green received these shares as a gift from his sister 4 years ago. The fair market value of the shares at the date of the gift was $7 per share. Green's sister inherited this stock from her stepmother's estate. At the date of her death, 7 years ago, the fair market value of this stock was $3 per share. The stepmother purchased this stock for $1 per share 10 years prior to her death.
7. Sold 2,000 shares of TWX Corp. stock at $8 per share. Green received 4,000 shares of TWX in a tax-free transaction for 2,000 shares of WTX Corp. stock he purchased in the prior year for $2 per share.

Answer & Explanation Solved by verified expert

See Answer