Oliver purchased the following stock of Doggie Treats Inc., 2014 10 shares @ $10
2015 10 shares @ $12
2016 20 shares @ $14
If Oliver sold 25 shares of stock in 2016 for $265,what is the loss on the sale of the stock? Assume the shares purchased in 2015 were held for more than one year.

Question

Quizplus · Accepted Answer

Oliver sold 25 shares in 2016, which means he sold 10 shares from 2014 and 15 shares from 2016. 
The cost of 10 shares from 2014 = 10 x $10 = $100
The cost of 10 shares from 2015 = 10 x $12 = $120
The cost of 20 shares from 2016 = 20 x $14 = $280
Total cost = $500
The proceeds from selling 25 shares in 2016 = $265
Therefore, the loss on the sale of stock is $500 - $265 = $235.
Out of the 25 shares sold, 15 were purchased in 2016 and held for less than one year. Therefore, the loss on these shares is a short-term loss.
The remaining 10 shares were purchased in 2015 and held for over a year, making it a long-term loss. 
Thus, the loss on the sale of stock is $8.00 long-term loss and $17.00 short-term loss.

Oliver Purchased the Following Stock of Doggie Treats Inc