A number of speci?c transactions do not necessarily follow the general tax provisions applicable to property transactions. Following are a group of transactions that are subject to speci?c tax provisions. For each of the situations, you are to answer the questions and cite the source for your answer.
a. Martin, a securities dealer, bought 100 shares of Datacard stock on April 5 of year 5 for $10,500. Before the end of that day, he identi?ed the stock as being held for investment purposes.
1. Never having held the stock for sale to customers, he sold the stock on May 22 of year 6 for $11,500. How much and what kind of gain or loss does he have?
2. Assume that later in year 5 he starts trying to sell the stock to customers and succeeds in selling it on May 1 of year 6 for $9,000.
How much and what kind of gain or loss does he have?