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Carol and Dave each purchase 100 shares of Burgundy, Inc., a publicly owned corporation, in July for $10,000 each. Carol sells her stock on December 31 for $8,000. Since Burgundy's stock is listed on a national exchange, Dave is able to ascertain that his shares are worth $8,000 on December 31. Does the tax law treat the decline in value of the stock differently for Carol and Dave? Explain.
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Unformatted text preview: Please post your answers to this question and post a response to a minimum of one classmate's answer. Carol and Dave both have a decrease in value of $2,000, however, only Carol has a realized and recognized loss of $2,000. Carols stock sale qualifies as a disposition. Daves stock is a decrease in value and does not quality as a disposition since it has not been sold....
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This note was uploaded on 02/08/2010 for the course ACC317 adv. feder taught by Professor Man during the Spring '10 term at Strayer.

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