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AC553_W7_Solution10_43

# AC553_W7_Solution10_43 - Solution Realized loss is \$1,000...

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1 Problem 10-43 Solution Gain or Loss: Wash Sales Harold Haas owns 100 shares of Spartan Corp. common stock with an adjusted basis of \$10,000. On July 28, 2007, he sold all 100 shares for \$9,000. On August 18, 2007, he purchased 80 shares of Spartan common stock for \$7,500 and 20 shares of Spartan preferred stock for \$3,000. What is Harold’s recognized gain or loss on the sale and what is his basis per share in the new stock?
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Unformatted text preview: Solution: Realized loss is \$1,000 or (\$9,000 1 \$10,000). Recognized loss is \$200 or (\$1,000 × 20/100). This is a wash sale only for 80 shares of stock because the time from July 28 to August 18 was only 21 days and only 80 shares were purchased. Basis of New Common: \$7,500 + \$800 = \$8,300 or \$103.75 per share (80 shares). Basis of Preferred: \$3,000 or \$150 per share....
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