Tom, Deck and Harry, estate residuary beneficiaries, each received a distributio
ID: 2592780 • Letter: T
Question
Tom, Deck and Harry, estate residuary beneficiaries, each received a distribution of property from the estate consisting of 100 shares of XYZ, Inc. The stock constituted original estate inventory. The decedent has paid $1,000 for each 100 share lot and each 100 share lot was worth $2,000 when he died. Deck sold his 100 share lot for $1,500 two months after receiving it. Deck
a. realizes and recognizes a long term capital loss of $500.
b. realizes and recognizes a short term capital gain of $500.
c. realizes and recognizes a long term capital gain of $500.
d. realizes neither gain nor loss.
Explanation / Answer
DECK GOT THE 100 SHARES
SALE PRICE OF THE SAHRES 1500
WORTH OF THE SHARES 1000
GAIN = 500
HE SOLD THE SHARES WITHIN 2 MONTHS SO IT IS A SHORT TERM GAIN
THE ANSWER IS :
B. DECK REALIZE AND RECONGNISE A SHORT TERM CAPITAL GAIN OF 500.