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Tax Question XYZ shares.pngWith

respect to XYZ stock, I originally acquired three original issue $10,000 XYZ convertible debentures on 7/18/2017 for $30,000. The conversion feature allowed me to convert each bond to 5,000 shares of XYZ common stock upon surrender of the bond accompanied by a $20,000 payment. On 6/16/2018, I surrendered each bond and paid $20,000 per bond (or a total of $60,000) in return for 15,000 shares of XYZ stock -- 5,000 shares attributable to each bond. At the time of conversion, the 15,000 shares were worth $180,000. I then sold them on 9/26/2018 for $282,000.

What is basis of the XYZ shares at time of sale and what is the gain or loss at time of sale on 9/26/18?

Tax Question XYZ shares.png

During the year, Mr. Kupka sold publicly traded securities on the open market in the
number of shares, on the dates and for the amounts set forth in the following table:
Date Sold
Net Sales Proceeds
20,000 com shs ABC, Inc
$247, 000
10, 000 com shs JKL, Inc
$337, 500
15, 000 com shs XYZ, Inc
$282, 000
The shares were acquired by Mr. Kupka in the following manner:
the ABC shares were received from Mr. Kupka's grandmother as a result of her
death on 7-13-18. She originally acquired the shares on 9-10-17.
. the JKL shares were purchased by Mr. Kupka, and were sold in two 5,000-share
lots. One of the lots was used to cover a "short sale" of 5,000 shares of JKL stock
that Mr. Kupka entered into on 8-28-18, giving him 30 days to close..
the XYZ shares were purchased by Mr. Kupka on 6-16-18 for $60,000 plus
convertible debentures.

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