Karen purchased 100 shares of Gold Corporation stock for $11,500 on January 1,2013.In the current tax year (2016),she sells 25 shares of the 100 shares purchased on January 1,2013,for $2,500.Twenty-five days earlier,she had purchased 30 shares for $3,000.What is Karen's recognized gain or loss on the sale of the stock,and what is her basis in the 30 shares purchased 25 days earlier?

Question

Quizplus · Accepted Answer

Karen's sale of 25 shares results in a wash sale because she purchased substantially identical stock (30 shares) within 30 days before the sale. Therefore, the loss is not recognized, and the disallowed loss ($375) is added to the basis of the new shares, making the basis $3,375.

Karen Purchased 100 Shares of Gold Corporation Stock for $11,500