21. Comment on the following transactions:
Mort owns 500 shares of Pear, Inc. stock with an adjusted basis of 22,000. On July 28, 2014, he sells 100 shares for 3,000. On August 16, 2014, he purchases another 100 shares for 3,400. Mort realized loss of 1,400(3,000-4,400 on the July 28 sales not recognized, and his adjusted basis for the 100 shares purchased on the August 16 is 4,800. Explain
How would you answer above change if Mort purchased the 100 shares on December 27, 2014 rather than on August 16, 2014?
59. Ira Cook is planning to make a charitable contribution to the boy scouts of Crystal, Inc. stock worth 20,000. The stock has an adjusted basis of 15,000. A friend has suggested that Ira sell the stock and contribute the 20,000 in proceeds rather than contribute the stock.
Should Ira follow the friend's advice? Why or why not?
Assume that the fair market value is only 13,000. In this case, should Ira follow the friend's advice? Why or why not?
Rather than make a charitable contribution to the boy scouts, Ira is going to make a gift to Nancy, his niece. Advise Ira regarding the two previous options.
Write a letter to Ira regarding whether in (a) he should sell the stock and contribute the cash or contribute the stock. He has informed you that he purchased the stock six years ago. Ira's address is 500 Ireland Avenue, DeKalb, IL 60115.
64. Louis owns three pieces of land with an adjusted basis as follows: parcel A 75,000, parcel B 125,000 and parcel C 175,000. Louis sells parcel A to his uncle for 50,000, parcel B to his partner for 120,000 and parcel C to his mother for 150,000.
What is the recognized gain or loss from the sale of each parcel?
If Louis's uncle eventually sells his land for 90,000, which is his recognized gain or loss?
If Louis's partner eventually sells his land for 130,000, what is his recognized gain or loss?
If Louis's mother eventually sells her land for 165,000, what is her recognized gain or loss?