February 20, 2012: Lee Ranger purchased 100 shares of Pine Corp. stock for $30 a share. April 7, 2012: Lee sold 50 shares of Pine Corp. stock for $20 a share. April 24, 2012: Lee purchased 25 shares of Pine Corp. stock for $25 a share.
What is the basis of the 25 shares purchased on April 24, 2012?
A) $625
B) $875
C) $1,125
D) $750

Question

Quizplus · Accepted Answer

the re is a $500 loss on the April 7 sale, but $250 is disallowed and the other $250 is short-term loss. Basis of 25 shares = $625 + $250, or $875.

February 20, 2012: Lee Ranger Purchased 100 Shares of Pine