Ms. Fresh bought 1,000 shares of Ibis Corporation stock for $6,300 on January 15, 2017. On December 31, 2019, she sold all 1,000 shares of her Ibis stock for $5,150. Based on a hot tip from her friend, she bought 1,000 shares of Ibis stock on January 23, 2020, for $3,325. What is Ms. Fresh's recognized loss on her 2019 sale, and what is her basis in her 1,000 shares purchased in 2020?

Question

Business

Glenn Nolan

27 January, 22:12

Ms. Fresh bought 1,000 shares of Ibis Corporation stock for $6,300 on January 15, 2017. On December 31, 2019, she sold all 1,000 shares of her Ibis stock for $5,150. Based on a hot tip from her friend, she bought 1,000 shares of Ibis stock on January 23, 2020, for $3,325. What is Ms. Fresh's recognized loss on her 2019 sale, and what is her basis in her 1,000 shares purchased in 2020?

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Answers (1)

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Russell Lane · Answer 1

No loss on 2019 Sales and basis in 2020 purchase $ ($4,475

Explanation:

This is an example of wash sale where no loss is recognized at the time of sale.

The loss of 2019 = 5,150-6,300=$1,150. This will be added in 2020 purchase=$1,150+$3,325=$4,475