Question

1)Christina, who is single, purchased 580 shares of apple stock several years ago for $22,040. During her year-end tax planning, she decided to sell 290 shares of apple for $9,570 on December 30. However, two weeks later, apple introduced its latest iphone, and she decided that she could buy the 290 shares (cost of $10,150) of apple back before prices skyrocket.

a) What is Christina's deductible loss on the sale of 290 shares? what is her basis in the 290 new shares?

The answer is not $1,450 or $116,000

b) Assume the same facts, expect that Christina repurchased only 145 shares for $5,075. What is Christina's deductible loss on the sale of 290 shares? What is her basis in the 145 new shares?

2) Anwer owns a rental home and is involved in maintaining it and approving renters. During the year he has a net loss of $17,800 from renting the home. His other sources of income during the year are a salary of $101,250 and $233,200 of lng-term captal gains.

a) How much of Anwer's $17,800 rental loss can he deduct currently if he has no sources of passive income?

The answer is not $5,025

Answer 1