Mr. Slake sold 1,580 shares of publicly traded DDL stock (tax basis $49,240) for $40,000 cash on February 13. He paid $43,000 cash to purchase 1,600 DDL shares on March 2. Compute Mr. Slake's loss recognized on the February 13 sale and determine his tax basis in the 1,600 shares.

Question

Quizplus · Accepted Answer

Mr. Slake's sale of shares on February 13 results in a wash sale because he repurchased substantially identical stock within 30 days. Therefore, no loss is recognized, and the disallowed loss ($9,240) is added to the basis of the new shares, resulting in a $52,240 basis.

Mr Slake Sold 1,580 Shares of Publicly Traded DDL Stock