the JKL shares were purchased by Mr. Kupka on 6-16-2022 for $80,000 plus convertible debentures....
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the JKL shares were purchased by Mr. Kupka on 6-16-2022 for $80,000 plus convertible debentures.
JKL: With respect to JKL stock, Mr. Kupka purchased four original issue $10,000 JKL debentures on 7-18-2021 for $40,000. The conversion feature allowed me to convert each bond into 5,000 shares of JKL upon surrender of the bond accompanied by a $20,000 payment. On 6-16-2022, Mr. Kupka surrendered each bond and paid $20,000 per bond (or a total of $80,000) in return for 20,000 shares of JKL stock 5,000 shares attributable to each bond. At the time of conversion, the 20,000 shares were worth $200,000. Mr. Kupka then sold them on 8/26/2022 for $240,000.
Questiona:
Where appropriate for income tax purposes.
b) Calculate the amount of realized gain or loss respecting each transaction. (That necessarily means you must determine Mr. Kupkas amount realized for each disposition and his adjusted basis in the asset being disposed of.)
c) Determine the amount of recognized gain or loss on.
d) determine holding period and basis.
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