In September of 2013,Michelle sold shares of qualified small business stock for $1,000,000 that had a basis of $200,000.She had held the stock for 7 months.Forty-five days after the sale she purchased other qualified small business stock for $1,100,000.What is the basis in the new stock she purchased?

Question

Quizplus · Accepted Answer

Michelle can use the proceeds from the sale of the qualified small business stock to purchase other qualified small business stock within 45 days without paying taxes on the original sale. The basis in the new stock is increased by the amount of the proceeds from the sale, which is $1,000,000. Therefore, the basis in the new stock is $1,100,000 - $1,000,000 = $100,000 above the purchase price, which is $300,000. So, the correct answer is B.

In September of 2013,Michelle Sold Shares of Qualified Small Business