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Comment on the following transactions. a. Mort owns 500 shares of Pear, Inc. stock with an adjusted basis of $22,000.

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Comment on the following transactions.

a. Mort owns 500 shares of Pear, Inc. stock with an adjusted basis of $22,000. On July 28, 2022, he sells 100 shares for $3,000. On August 16, 2022, he purchases another 100 shares for $3,400. Explain why Mort’s realized loss of $1,400 ($3,000 2 $4,400) on the July 28 sale is not recognized and his adjusted basis for the 100 shares purchased on August 16 is $4,800.

b. Explain how and why your answer in part (a) would change if Mort purchased the 100 shares on December 27, 2022, rather than on August 16, 2022.

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Question Details
Chapter # 13- Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges
Section: Discussion Questions
Problem: 15
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Question Posted: September 24, 2023 07:47:17
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