Karen purchased 100 shares of Gold Corporation stock for $11,500 on January 1,2011.In the current tax year (2014),she sells 25 shares of the 100 shares purchased on January 1,2011,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

Amount realized $2,500
Adjusted basis (25 × $115)(2,875)
Realized loss ($375)
Recognized loss $ -0-
Since the transaction qualifies as a wash sale,the realized loss of $375 is disallowed.This amount is added to the adjusted basis of the shares purchased 25 days earlier.Therefore,the adjusted basis for these shares is $3,375 ($3,000 + $375).

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