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4 February, 17:40

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. 4 February, 17:44
    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. 4 February, 17:51
    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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