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Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of...

Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of Microsoft common stock over the years: Date Purchased Shares Basis 7/10/2008 490 $ 19,110 4/20/2009 390 17,472 1/29/2010 590 19,234 11/02/2012 340 12,988 If Dahlia sells 1,070 shares of Microsoft for $63,130 on December 20, 2018, what is her capital gain or loss in each of the following assumptions? (Do not round intermediate calculations.) a. She uses the FIFO method.

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Expert Solution

Date purchased Shares Basis
7/10/2008               490        19,110
4/20/2009               390        17,472
1/29/2010               590        19,234
11/02/2012               340        12,988
Under FIFO Method
1070 shares has been sold means the below shares has been sold
7/10/2008               490        19,110
4/20/2009               390        17,472
1/29/2010               190          6,194 (19,234/590)*190
(1070-490-390)
Total adjusted basis            1,070        42,776
Capital gain = (63,130-42,776) = $20,354

ekkarill92 answered 1 year ago
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