1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
klemol [59]
3 years ago
9

An individual acquired 500 shares of stock on December 20, year 1, for a personal portfolio. On March 15, year 2, the individual

executed a short sale of 500 shares of the stock. On December 21, year 2, the individual delivered the 500 shares to cover the short sale. Which of the following statements best characterizes the gain or loss on the short sale?
1 The transaction will be treated as ordinary income because of the March short sale.
2 The transaction will be treated as a long-term capital asset sale.
3 The transaction will be treated as a 40% short-term/60% long-term capital asset sale.
4 The transaction will be treated as a short-term capital asset sale.
Business
1 answer:
ziro4ka [17]3 years ago
8 0

Answer:

4) The transaction will be treated as a short-term capital asset sale.

Explanation:

This person engaged in a short sale, which is classified as a short term capital asset sale since the holding period was shorter than 1 year (March 15 - December 21).

A short sale takes place when an investor sells property that he either doesn't own, or owns but doesn't want to sell. This sale is done in two steps:

  1. the investor borrows the stock and delivers it to the buyer
  2. the investor later purchases the same stock (hopefully at a lower cost) and returns them to the lender

The investor cannot realize any gain or loss until he/she actually returns the stocks to the lender. If the investor managed to buy the stocks at a lower price, he/she will have realized a capital gain.

You might be interested in
An easy-to-use decision support system that specifically supports strategic decision making is a(n) ________ system
kondaur [170]

An easy-to-use decision support system that specifically supports strategic decision making is called executive support system.

A decision support system is one software that helps to make effective decisions with providing various alternatives of the solution to the problems addressed.

Strategic decision making is a process that provide an overall decision over the edge gaining an extra advantage for the firm analysing the decisions taken and the impact over the organisation. Wrong decisions taken at the wrong time may result in specifically driven decisions.

To learn more about decision support system here,

brainly.com/question/14279526

#SPJ4

4 0
1 year ago
You own 100 shares of Troll Brothers' stock, which currently sells for $120 a share. The company is about to declare a 2-for-1 s
SSSSS [86.1K]

Answer:

You will have 200 shares of stock, and the stock will trade at or near $60 a share.

Explanation:

When a company declares a 2-for-1 stock split, its shares' value is cut by half, while the number of stocks of each share holder doubles.

If, before the split, the stock had a value of $120 per share, after the stock split it will sell for close to $60 a share.

If you previously had a position of 100 shares of Troll Brothers' stock, after the 2-for-1 split you will have 200 shares.

Therefore, you will have 200 shares of stock, and the stock will trade at or near $60 a share.

8 0
3 years ago
How many hours can you work part-time and still collect unemployment?.
Pavel [41]

Answer: To be eligible for partial benefits, you must work at least 80% of the hours required for the employment. If you worked a 40-hour week, for example, you won't be eligible for benefits if you work more than 32 hours.

Explanation: See above.

Have a good day.

8 0
1 year ago
Clampett, Inc., has been an S corporation since its inception. On July 15, 2020, Clampett, Inc., distributed $44,000 to J.D. His
Serjik [45]

Answer:

-$8,600

Explanation:

Data provided in the question:

Distributions = $44,000

Basis = $42,000

Amount of ordinary income allocated = $10,600

Now,

Capital gain from distribution in excess of basis

= Distribution - Basis -  Amount of ordinary income allocated

= $44,000 - $42,000 - $10,600

= -$8,600

here, negative sign depicts there is a capital loss

8 0
3 years ago
Rossiter Restaurants is analyzing a project that requires $180,000 of fixed assets. When the project ends, those assets are expe
Leviafan [203]

Answer:

Cash in-flow in the last year.

Explanation:

Salvage value, also known as residual value, is the amount that you receive from sale of Property, Plant, and Equipment at the end of useful life. When computing the NPV of any project, we consider all the relevant cash flows of that project. Since, $45,000 will be received when project ends from sale of Fixed asset, so this figure will be treated as Cash in-flow and discounted.

8 0
2 years ago
Other questions:
  • Computers are typically protected from viruses by the use of
    12·2 answers
  • The constraint at Rauchwerger Corporation is time on a particular machine. The company makes three products that use this machin
    15·1 answer
  • Bianca's discount home furnishings store is in a strip mall. She wants to know what other businesses in the strip mall her custo
    6·2 answers
  • Choose the correct price-elasticity label for each pair of goods. Assume this involves demand for the total of all people curren
    8·1 answer
  • Which of the following is a step in the investment planning process?
    8·1 answer
  • Karla starts her speech by saying, “Many of you know that I work closely with the AIDS Alliance agency in our city. You may also
    11·1 answer
  • Ace Industries has a current assets equal to $3 illion . the company's current ratio is 1.5. and its quick ratio is 1.0.
    9·1 answer
  • When analyzing financial statements it is important to recognize that accounting distortions can arise. Accounting distortions a
    7·1 answer
  • When the market rate is 10%, a company issues $60,000 of 12%, 10-year bonds dated January 1, 2017, that mature on December 31, 2
    13·1 answer
  • Which of these elements contributes toward globalization of the economy?
    14·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!