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blem 5-64 (LO 5-2) Three years ago, Adrian purchased 100 shares of stock in X Corp. for
$10,000. On December 30 of year 4, Adrian sells the 100 shares for $6,000. (Input all amounts as
positive values.) a. Assuming Adrian has no other capital gains or losses, how much of the loss is
Adrian able to deduct on her year 4 tax return? b-1. Assume the same facts as in part a, except
that on January 20 of year 5, Adrian purchases 100 shares of X Corp. stock for $6,000. How
much loss from the sale on December 30 of year 4 is deductible on Adrian’s year 4 tax
return? b-2. What basis does Adrian take in the stock purchased on January 20 of year 5?
Solution
Answer (a)
Answer (b)(1)
Since Adrian buy back the sold shares within 31 days of sales, deduction allowed earlier will be
disallowed.
Answer (b)(2)
Adrian;s basis is that if he sells Stock at loss and buy back it, he will get benefit of deduction of
3000.
Sales Consideration 6000
Less: Purchase Consideration 10000
Capital Loss 4000
Lower of Deduction 3000 or Capital Loss 3000
blem 5-64 (LO 5-2) Three years ago- Adrian purchased 100 shares of sto.docx

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  • 1. blem 5-64 (LO 5-2) Three years ago, Adrian purchased 100 shares of stock in X Corp. for $10,000. On December 30 of year 4, Adrian sells the 100 shares for $6,000. (Input all amounts as positive values.) a. Assuming Adrian has no other capital gains or losses, how much of the loss is Adrian able to deduct on her year 4 tax return? b-1. Assume the same facts as in part a, except that on January 20 of year 5, Adrian purchases 100 shares of X Corp. stock for $6,000. How much loss from the sale on December 30 of year 4 is deductible on Adrian’s year 4 tax return? b-2. What basis does Adrian take in the stock purchased on January 20 of year 5? Solution Answer (a) Answer (b)(1) Since Adrian buy back the sold shares within 31 days of sales, deduction allowed earlier will be disallowed. Answer (b)(2) Adrian;s basis is that if he sells Stock at loss and buy back it, he will get benefit of deduction of 3000. Sales Consideration 6000 Less: Purchase Consideration 10000 Capital Loss 4000 Lower of Deduction 3000 or Capital Loss 3000