Ashley,a calendar year taxpayer,owns 400 shares of Yale Corporation stock that she purchased two years ago for $4,000.In the current year Ashley sells all 400 shares of the Yale Corporation stock for $2,400 on December 27.On January 4 of the following year,Ashley purchases 300 shares of Yale Corporation stock for $800.Ashley's recognized loss and her basis in the newly purchased 300 shares of Yale Corporation stock are

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Ashley's recognized loss is calculated as the selling price ($2,400) minus the adjusted basis of the sold shares, which is the original cost of $4,000. Therefore, her recognized loss is $1,600.
 
On January 4 of the following year, Ashley purchases 300 shares of Yale Corporation stock for $800, so her basis in the newly purchased 300 shares is $800.

Ashley,a Calendar Year Taxpayer,owns 400 Shares of Yale Corporation Stock