Question

J0 short-term loss. Mark for follow up Question 29 of 75. In 2017, Glen received a gift of 200 shares of common stock. The stock was worth $8,000 when he received it. The donor had originally paid $10,000 for the stock when he bought it in 2015. If Glen sells the stock for $12,000 in 2018, what is his capital gain? $0 $2,000 $4,000 $12,000 OMark for follow up Question 30 of 75. Seth owns 150 shares of stock with a basis of $1,800 at $12 per share. The stock splits three for one. How maD does he now own, and what is his basis per share? 50 shares with a basis of $36 per share. 50 shares with a basis of $108 per share. A 450 shares with a basis of $4 per share. O 450 shares with a basis of $12 per share.

Answer 1

Question 29 of 75

If the FMV when gift is received is less than the original basis and later that stock is sold for a price which is more than the original basis then the original basis should be used for calculating capital gain

Capital Gain= Sale price of stock - Price at which stock was originally purchased

= 12000-10000=2000

Therefore Second option is correct

Question 30 of 75

Stock split increases the number of shares but reduces the par value per share thus keeping the total par value just as same as it was before stock split.

Therefore shares after stock split = 150 x 3 = 450

Price after stock split = 12 / 3 = 4

Therefore Third option is correct