Question

Required information [The following information applies to the questions displayed below.] Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of Microsoft common stock over the Part 1 of 2 years: Date Purchased Shares Basis $ 20,000 7/10/2008 500 4/20/2009 400 18,320 1/29/2010 600 20,160 11/02/2012 13,720 350 If Dahlia sells 1,100 shares of Microsoft for $66,000 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.

Answer 1

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Date Purchased 10-Jul-08 20-Apr-08 29-Jan-10 02-Nov-12 Shares Basis 500 $ 20,000 40018320 600 20160 350 13720 Date of Sales 20-Dec-18 Shares 1100 Basis 66000 PART-A FIFO Method PART-B Specific Identification Method Particulars Sales Value Share 1100 Value 66000 Share Value 1100 66000 110 Particulars Sales Value Purchase Cost under FIFO a) 29-Jan-2010 b) 10-Jul-2008 -500 -400 -20000 -18320 -600-20160 -500-20000 Purchase Cost under FIFO a) 10-Jul-08 b) 20-April-08 c) 29-Jan-10 (Balance Shares)** ** (20160/600*200) -200 -6720 Capital Gain Capital Gain @ 32% 25840 8268.8 Capital Gain Capital Gain @ 32% 86960 27827.2