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ID: 2574934 • Letter: C
Question
Check Your Work - Microsoft Edge ezto cancel This window shows what is correct and incorrect for the work you have completed so far Even if all of the work you have done so far is correct, you may not have completed everything value: 5.50 points Crystal owns 174 shares of Carson, Inc., stock that has an adjusted basis of $132,240. On December 18, 2016, she sells the 174 shares for FMV ($120,930). On January 7, 2017, she purchases 232 shares of Carson stock fo$186.296. (lf there is no gain or loss, select "No gain/loss".) a. What are Crystals realized and recognized gain or loss on the sale of the 174 shares sold on December 18, 2016? b. What is Crystal's adjusted basis for the 232 shares purchased on January 7, 2017? C. How would your answers in (a) and (b) change if she purchased only 116 shares for $101,500 in January? (Do not round intermediate computations.) Answer is complete but not entirely correct. a. Realized loss 11,310 No gain/loss Adjusted basis of $ 197,606 $ 3,770 $11,310 $193,836 c. Recognized loss Realized loss Adjusted basis o shares O Type here to search 12:33 PM 4x 11/18/2017 ^ DExplanation / Answer
c. Since Crystal only repurchased 2/3 of the shares (116 shares versus 174 sold), then 1/3 of the loss on the December sale is allowed.
Recognized loss = $11310 x 1/3 = $3770 allowed
Realized loss = $11310
Adjusted basis of shares = $197606 + ($11310 - $3770) = $205146