John bought 1,000 shares of Intel stock on October 18, 2015, for $30 per share plus a $750 commission he paid to his broker. On December 12, 2019, he sells the shares for $42.50 per share. He also incurs a $1,000 fee for this transaction. a.) What is John's adjusted basis in the 1000 shares of Intel stock? b.) What amount does John realize when he sells the 1000 shares? c.) What is the gain/loss for John on the sale of his Intel stock? What is the character of the gain/loss?

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Business

Emilio Lutz

21 December, 13:27

John bought 1,000 shares of Intel stock on October 18, 2015, for $30 per share plus a $750 commission he paid to his broker. On December 12, 2019, he sells the shares for $42.50 per share. He also incurs a $1,000 fee for this transaction. a.) What is John's adjusted basis in the 1000 shares of Intel stock? b.) What amount does John realize when he sells the 1000 shares? c.) What is the gain/loss for John on the sale of his Intel stock? What is the character of the gain/loss?

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Answers (1)

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Eloise · Answer 1

Answer

A. $30,750

B.$41,500

C.$10,750

Explanation:

a. 30*1,000 = $30,000

30,000+750=$ 30,750

Therefore John's basis in the 1,000 shares of Intel stock is $30,750.

b. 1,000 * 42.50 = $42,500

42,500 - 1,000 = $41,500

Therefore John realizes $41,500

c. 41,500 - 30,750 = $10,750

John's gain on the sale of the Intel stock is

$10,750