Question

Karen Samuels (Social Security number 123-45-6789) makes the following purchases and sales of stock:

Transaction       Date       Number of Shares   Company Price per Share

Purchase          1-1-2015            300               MDG          $ 75

Purchase          6-1-2015            150               GRU           300

Purchase         11-1-2015             60               MDG            70

Sale             12-3-2015            200               MDG            80

Purchase          3-1-2016            120               GRU           375

Sale              8-1-2016             90               GRU           330

Sale              1-1-2017            150               MDG            90

Sale              2-1-2017             75               GRU           500

Assuming that Karen is unable to identify the particular lots that are sold with the original purchase, determine the recognized gain or loss on each type of stock:

a. As of July 1, 2015.

b. As of December 31, 2015.

c. As of December 31, 2016.

d. As of July 1, 2017.

Please explain so that I understand.

Answer 1

Answer a.
As of July 1, 2015 - No Recognized Gain or Loss
Answer b.
As of December 31, 2015 - Recognized Gain = MDG Shares = ($80 - $75) X 200 shares
As of December 31, 2015 - Recognized Gain = MDG Shares = $1,000
Answer c.
As of December 31, 2016 - Recognized Gain = GRU Shares = ($330 - $300) x 90Shares
As of December 31, 2016 - Recognized Gain = GRU Shares = $2,700
Answer d.
As of July 1, 2017 - Recognized Gain = MDG Shares = ($90 - $75) X 100 Shares + ($90 - $70) X 50 shares
As of July 1, 2017 - Recognized Gain = MDG Shares = $2,500
As of July 1, 2017 - Recognized Gain = GRU Shares = ($500 - $300) X 60 Shares + ($500 - $375) X 15 Shares
As of July 1, 2017 - Recognized Gain = GRU Shares = $13,875