Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 12, Problem 39P
Christopher regularly invests in internet company stocks, hoping to become wealthy by making an early investment in the next high-tech phenomenon. In 2012, Christopher purchased 3,000 shares of FlicksNet, a film rental company, for $15 per share shortly after the company went public. Because Christopher purchased the shares in their initial offering, the shares are qualified small business stock.
In 2019, Christopher sold 800 of the shares (at $325 per share) so that he could purchase a reservation for a seat on 1-lon Musk’s first human mission to Mars. What regular income tax consequences and AMT consequences arise for Christopher as a result of the sale of these shares?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
John bought 1,000 shares of intel stock on October 18,2015, for $30 per share, plus a $750 commission he paid to his broker. On December 12, 2019, he sold the shares for $42.50 per share. He also incurred a $1,000 fee for this transaction.
1. What is John's adjusted basis in the 1,000 shares of intel stock?
2. What amount does John realize when he sells the 1,000 shares ?
3. What is the gain or loss for John on sale of his intel stock?
4. What is the character of the gain or loss?
John bought $1,000 shares of intel stock on Oct 18,2016, for $30 per share plus $750 commission he paid to his broker. On Dec 12, 2020, he sells the shares for $42.50 per share. He also incurs a $1,000 fee for this transaction.
What’s john’s adjusted basis in the 1,000 shares of Intel Stock?
What amount does John realize when he sells the 1,000 shares?
What is the gain/loss for John on the sale of his Intel stock? What is the character of the gain/loss?
3) Sally purchased 100 shares of Intel in her IRA on January 4, 2018 for $95 per share. She subsequently sold those shares
on June 1, 2020 for $203 per share. What was the amount of her capital gain and how much tax would she pay on this
transaction?
9) Sally bought 300 shares of CSCO for $35.60 in her brokerage account on March 16, 2020, and sold half of her position on
August 24, 2020, for $42.20. What's her capital gain and at what tax rate will she pay on those gains?
17) Assume Josephine purchases a home for $180,000 and has a 20% down payment. If she finances the purchase with a
30 year mortgage with a 4% interest rate....... what is her monthly payment? If she pays the mortgage through the entire term
with no early payment, how much interest will she pay over the life of the loan?
19) Assume Earl purchased 1000 shares of Tesla in his brokerage account on June 1, 2017 for $33.74 per share and sold
his entire position for $62.93 per share on May 2, 2020. Assuming he is filing his…
Chapter 12 Solutions
Individual Income Taxes
Ch. 12 - Kelly was promoted and received a substantial...Ch. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Can any nonrefundable credits, other than the...Ch. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 11DQCh. 12 - Prob. 12DQCh. 12 - Prob. 13DQCh. 12 - Prob. 14DQCh. 12 - Prob. 15DQCh. 12 - Prob. 16DQCh. 12 - Prob. 17DQCh. 12 - During the year, Rachel earned 18,000 of interest...Ch. 12 - Compute the 2019 AMT exemption for the following...Ch. 12 - In March 2019, Serengeti exercised an ISO that had...Ch. 12 - Prob. 21CECh. 12 - Prob. 22CECh. 12 - Prob. 23CECh. 12 - Prob. 24CECh. 12 - Prob. 25CECh. 12 - Prob. 26PCh. 12 - Arthur Wesson, an unmarried individual who is age...Ch. 12 - Prob. 28PCh. 12 - Prob. 29PCh. 12 - Lisa records nonrefundable Federal income tax...Ch. 12 - Prob. 31PCh. 12 - Prob. 32PCh. 12 - Prob. 33PCh. 12 - In March 2019, Helen Carlon acquired used...Ch. 12 - Prob. 35PCh. 12 - Prob. 36PCh. 12 - Prob. 37PCh. 12 - Prob. 38PCh. 12 - Christopher regularly invests in internet company...Ch. 12 - Sammy and Monica, both age 67, incur and pay...Ch. 12 - Prob. 41PCh. 12 - Prob. 42PCh. 12 - Prob. 43PCh. 12 - Prob. 44PCh. 12 - Anh is single, has no dependents, and itemizes...Ch. 12 - Prob. 46PCh. 12 - Prob. 47PCh. 12 - Jane and Robert Brown are married and have eight...Ch. 12 - Prob. 49PCh. 12 - Renee and Sanjeev Patel, who are married, reported...Ch. 12 - Prob. 51PCh. 12 - Lynn, age 45, is single and has no dependents. Her...Ch. 12 - Prob. 53PCh. 12 - Robert A. Kliesh, age 41, is single and has no...Ch. 12 - Prob. 55CPCh. 12 - Prob. 1RPCh. 12 - Prob. 2RPCh. 12 - Prob. 3RPCh. 12 - Prob. 1CPACh. 12 - Prob. 2CPACh. 12 - Carol reports taxable income of 48,000. Included...Ch. 12 - Prob. 4CPA
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Fiona purchased 200 shares of Oxygon stock for $11 a share on August 11, 2020. On July 28, 2021, the price had fallen to $8. Concerned that the price might decline further, Fiona sold all her shares that day. She later regretted this move, and on August 7, 2021, she repurchased the stock when it was $10 a share. What is Fiona's 2021 capital gain or loss on these transactions? No gain or loss will be reported. $100 short-term loss. $200 short-term loss. $300 short-term loss.arrow_forwardIn 2017, Sandra gifted stock to her son, Eddy. Sandra originally purchased the stock for $45,000. At the date of gift, the stock had a fair market value of $32,000. In 2023, Eddy sold the stock for $27,000. What is Eddy's basis for determining his gain or loss on the sale of the stock?arrow_forwardIn 2017, Marvin bought 100 shares of ABC stock. He decided to sell the stock on March 30, 2022. Marvin’s original cost for the stock was $15,065 plus an additional $55 in broker’s fees. When he sold the stock, he received gross proceeds of $9,757. What is the net gain or loss from his transaction? Is it a long- or short-term capital gain or loss?arrow_forward
- Sheila’s mother purchased 100 shares of Apple stock in 1992. The original sale price was $26 per share for a total value of $2,600. She kept those 100 stocks until her death in June 2022. By the time of her death, the Apple stock value is $190 per share for a total value of $19,000. Sheila will not owe taxes for capital gains on the $16,400 increase in value. Why do you think the gains and losses should be separated from sheila's other gains and losses?arrow_forwardCindy works for Sky Manufacturers, a public corporation. In 2010, she was offered an option to purchase Sky Manufacturers shares at $35 per share from her employer (Sky Manufacturers). The fair market value of Sky Manufacturers stock on that day was $35 per share. The option had a four year exercise time limit. Cindy exercised her option in 2011 at which time she purchased 500 shares. The fair market value of Sky Manufacturers stock at that time was $52 per share. In 2014, Cindy sold these 500 shares for $60 per share. a. What is the effect of this option on Cindy’s taxable income in 2010? b. What is the effect on Cindy’s taxable income of her exercising the option in 2011, assuming she takes advantage of all possible tax options. c. What is the effect on Cindy’s taxable income of her selling the stock in 2014. d. How would your answers change if the value of the shares at the date of grant was $40 per share?arrow_forwardSam spends $10,000 for 500 shares of XYZ, Inc. He sells all of these shares for $7,000 (a $3.000 loss) on December 15, 2020. He purchases another 500 shares of identical XYZ stock for $8,000 on January 10, 2021. What is Sam's investment basis in the XYZ shares he bought on January 10, 2021?arrow_forward
- Tammy bought 100 shares of stock on January 30, 2021 when the share price was $20. She sold the stock for $24 a share on January 31, 2022. What is the gain or loss from this transaction? Is it a long- or short-term capital gain or loss?arrow_forwardOn February 4, 2017, Jonathon Cash bought 1,000 shares of Country Corporation stock for $6,800. On May 12, 2020, Jonathon sold all 1,000 shares of his Country Corporation stock for $5,400. After reading an article about a new product the company just released, he decided to buy 1,000 more shares of Country stock on June 3, 2020, for $3,450. What is Jonathon's recognized loss on his May sale of the Country stock, and what is his basis in the 1,000 shares he purchased in June?arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
How to (Legally) Never Pay Taxes Again; Author: Next Level Life;https://www.youtube.com/watch?v=q63F1pBrUHA;License: Standard Youtube License