Tom has owned 40 shares of Orange Corporation stock for five years.He sells the stock short for a total of $1,100.
One month later, he closes the short sale by purchasing and delivering 40 shares of Orange Corporation stock for a total of $600.Tom has a $500 short-term capital gain.

Question

Quizplus · Accepted Answer

Tom sold the stock short for $1,100 and later bought it back for $600, resulting in a profit of $500. Since the transaction was completed within a month, it is considered a short-term capital gain.

Tom Has Owned 40 Shares of Orange Corporation Stock for Five