Jack has a basis of $36,000 in his 1,000 shares of Acorn Corporation stock (a capital asset). The stock was acquired three years ago. He receives the following distributions as part of a plan of liquidation of Acorn Corporation: $$\begin{array} { l r }
\text { Date } & \text { Amount } \
\text { March } 31 \text { of } 2017 & \$ 10,000 \
\text { July } 15 \text { of } 2017 & 10,000 \
\text { November } 15 \text { of } 2018 & 10,000 \
\text { January } 15 \text { of } 2018 & 10,000
\end{array}$$ What are the amount and character of the gain or loss that Jack will recognize during 2017? During 2018?

Question

Jack has a basis of $36,000 in his 1,000 shares of Acorn Corporation stock (a capital asset). The stock was acquired three years ago. He receives the following distributions as part of a plan of liquidation of Acorn Corporation: $$\begin{array} { l r } 
\text { Date } & \text { Amount } \
\text { March } 31 \text { of } 2017 & \$ 10,000 \
\text { July } 15 \text { of } 2017 & 10,000 \
\text { November } 15 \text { of } 2018 & 10,000 \
\text { January } 15 \text { of } 2018 & 10,000
\end{array}$$ What are the amount and character of the gain or loss that Jack will recognize during 2017? During 2018?

Quizplus · Accepted Answer

The Answer of Jack has a basis of $36,000 in his 1,000 shares of Acorn Corporation stock (a capital asset). The stock was acquired three years ago. He receives the following distributions as part of a plan of liquidation of Acorn Corporation: $$\begin{array} { l r } 
\text { Date } & \text { Amount } \
\text { March } 31 \text { of } 2017 & \$ 10,000 \
\text { July } 15 \text { of } 2017 & 10,000 \
\text { November } 15 \text { of } 2018 & 10,000 \
\text { January } 15 \text { of } 2018 & 10,000
\end{array}$$ What are the amount and character of the gain or loss that Jack will recognize during 2017? During 2018?

Jack Has a Basis of $36,000 in His 1,000 Shares