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22 April, 05:44

Ms. Crocker bought 1,000 shares of EMO Corporation stock for $10,000 on January 20, 2017. On December 28, 2019 she sold all 1,000 shares of her EMO stock for $9,000. Based on a hot tip from her friend, she bought 1,000 shares of EMO stock on January 15, 2020 for $7,000. What is Ms. Crocker's recognized loss on her 2019 sale and what is her basis in her 1,000 shares purchased in 2020?

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  1. 22 April, 08:29
    0
    1,000 long-term capital loss

    new shares basis $7,000

    Explanation:

    The sales realize a long term loss for 1,000 dollar

    It is long term as the shares were held for a period of time over 2 years

    and is a loss as these shares were bought at 10,000 while sold at 9,000

    The new share basis will be of 7,000 as it is the value ofthe new purchase.
  2. 22 April, 08:42
    0
    Given:

    Number of shares = 1000 shares

    Cost price = $10000

    Selling price = $9000

    In 2020,

    Number of shares = 1000 shares

    Cost price = $7000

    Loss in dollars = cost price - selling price

    = $10000 - $9000

    = $1000

    B.

    Cost basis = (recent purchase of shares) / number of shares

    = ($7000) / 1000

    = $7 per shares
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