Oliver, a calendar-year taxpayer, owns 50 shares of Copper Corporation stock, which was purchased two years...

Oliver, a calendar-year taxpayer, owns 50 shares of Copper Corporation stock, which was purchased two years ago for $30,000. Oliver sells all 50 shares on December 31, of the current year (2019), for $20,000 and on January 15 (2020), of the following year, purchases 25 shares of Copper Corporation stock. Oliver's recognized loss will be (LABEL AND SHOW ALL WORK WITH CALCULATIONS)

A) $0

B) $5,000.

C) $7,500.

D) $10,000.

Expert Solution

Solution:

Long Term Capital Loss: If any shares are hold for more than 12 months than that is classified as long term capital assets.

If any gain or loss is arrived from sale of these investment than this is long term capital gain or long term capital loss accrued in the year of sale.

Stock is sold as on December 31 2019 it means loss or gain is taken in the year of 2019.

Calculation of Gain or loss on sale of Stock

Sale Value of Stock = $ 20,000

Less: Purchase value of the Stock = $ 30,000

Loss on Sale of Stock = $ - 10,000

Answer = Option D = $ 10,000

ekkarill92 answered 1 year ago

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