1. Aaron received 640 shares of Microsoft, Inc. stock from his aunt's estate on January 14, 2016 when the value of the stock was $53.11 per share. The aunt died on 11/12/2015 when the value of stock was $53.32 per share. The aunt received the 640 shares of stock from Aaron on 5/5/2015 when the value of the stock was $46.28 per share. Aaron purchased 1000 shares of Microsoft,Inc. stock on 3/4/2009 for $16.12 per share and received a 2:1 stock split on the 1000 shares on June 13,2010.
On 2/1/16 a 2.5:1 stock split is received on the above mentioned Microsoft stock.
On 7/15/2016 Aaron sold 500 shares of Microsoft stock he received from his aunt's estate and 465 post-split shares from the original 1,000 shares he purchased on 3/4/09. The sales price per share was $58.12.
Required:
For each transaction show the computation, where applicable, for
A. amount realized
B. Original basis
C. Adjusted Basis
D. Realized gain or loss
E. Recognized gain or loss
F. Capital or Ordinary
G. Long term or short term if a capital item
H. Cite the IRS code and Regulation which controls your answer
I. Assume the taxpayer in this project is married filling a joint tax return with no dependents.