Lloyd purchased 100 shares of Gold Corporation common stock for $20 per share for a total basis of $2,000. Several years later, on May 1 of the current year, Lloyd sells all 100 shares for $500. On May 29 of the current year, Lloyd purchases 30 shares of Gold Corporation common stock for $180. a.How much loss is Lloyd allowed to recognize?b.What is Lloyd's basis in the 30 new shares?
What will be an ideal response?
| a. | Initial loss is $1,500 ($500-$2,000). 70 shares/100 shares × $1,500 = $1,050 loss allowed. The |
| b. | $180 + $450 disallowed loss = $630. |
Business
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