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Can someone check my answers. Thank yOU?

Asked by: Sildenafil plan 2787 views YA Discussion

Jacob sold some stock this year, and has come to you to prepare his tax return.

PDQ stock:
• Jacob inherited 200 shares of PDQ stock from his great-uncle Thomas who died on March 7, 2011.
• Great-uncle Thomas’ basis was $ 15 per share.
• The fair market value on the date of death was $ 25 per share.
• Jacob sold 100 shares of PDQ on July 1, 2011.
ABC stock:
• On February 5, 2011, Jacob sold 200 shares of ABC stock, which he purchased in 1995.
• Jacob does not know the basis for his ABC stock, and the basis is not shown on the 1099-B he received from the broker.

1. Jacob’s holding period for his 2011 sale of inherited PDQ stock is long-term.

2.2. What is the cost or other basis of the inherited PDQ stock that Jacob sold in 2011? $ _____.
(Do not enter dollar signs, commas, or decimal points in your answer.)

3. Jacob does not know the basis of his ABC stock. What can he do?
A. He can contact his broker for help calculating his basis.
B. He can use $ 0 as his basis.
C. He can calculate his basis by locating and reviewing all of the relevant ABC stock records.
D. Any of the above.
I say it is D

• Ross and Mary will file a joint return.
• Ross and Mary purchased their home in 2004 for $ 150,000.
• In 2006, Ross and Mary added a swimming pool at a cost of $ 10,000.
• In 2009, they repaired the dishwasher at a cost of $ 200.
• Ross and Mary lived in the house as their main home until they sold it on June 18, 2011.
• Ross and Mary sold the home for $ 145,000 and received a Form 1099-S reporting the sale.
• Ross and Mary are U.S. citizens and have valid social security numbers.

4. Which expenditures can Ross and Mary use to adjust the basis of their home?

A. None, their basis is their original purchase price.
B. The cost of the new pool.
C. The cost of the dishwasher repair.
D. The cost of the new pool and the cost of the dishwasher repair.
I say it is A

5. Ross and Mary can deduct a loss on the sale of their home.

• On January 3, 2011, Gabriella purchased 2,500 shares of the ABC mutual fund for $ 15,000.
• On December 27, 2011, the fund paid a capital gain distribution of $ 300 that was reinvested to purchase an additional 100 shares.
• The fund did not pay dividends.
• Gabriella received Form 1099-DIV reporting the capital gain distribution, and a year-end statement showing $ 7,800 as the December 31, 2011, value of her 2,600 shares.
• This is Gabriella’s only investment account and she did not sell any shares in 2011.

6. The total basis of all Gabriella’s ABC mutual fund shares held on December 31, 2011 is $ _____.
(Do not enter dollar signs, commas, or decimal points in your answer.)

7. The decline in value of Gabriella’s investment resulted in a deductible loss on her 2011 Form 1040, line 13.

8. Where on the tax return should Gabriella’s December 27 capital gain distribution appear?
A. As a dividend on Form 1040, line 9a
B. As a capital gain distribution on Form 1040, line 13
C. As other income on Form 1040, line 21
D. The distribution is not reported because the shares were reinvested.

How others found here:

  • jacob\s holding period for his 2011 sale of inherited pdq stock is long-term
  • Steven does not know the basis of his XYZ stock What can he do?

2 Answers

  1. Judy on Feb 01, 2013 Reply

    You might want to go over those again, you have several errors – and also, figure out answers for where you just have “I’m not sure”.

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  2. card-ron on Feb 01, 2013 Reply

    I’m afraid you haven’t done near as well with these questions as you have previous homework.

    #2 His basis is the fair market value of the stock on the date of Thomas’s death

    #4 The pool adds to the basis of their house. Thus, the answer is B.

    #5 Generally speaking, a loss on a personal property is not deductible

    #6 The basis is Gabriella’s original investment plus the reinvested capital gain distribution

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