Answer:a)$195,500 b) $10,735 c)$6,900
Explanation
a)adjusted basis of Kevin’s Bluebird stock on December 31, 2020?
1,000 shares was bought for $115,000
Therefore it was bought at $115 per share
Also
750 shares was bought at $80,500 and therefore bought at 107.33 per share
So in total of 1750 shares, He spent $195,500 ($115,000+ $80,500)
b.On December 12, 2020,he bought shares at 107.33 per share
500 shares would be 500 x $107.33=$53, 665
Therefore, Kevin’s recognized gain or loss from the’ sale of Bluebird stock on March 1, 2021 would be
$64,400- $53, 665 = $10,735
c.Assuming he cannot identify the shares sold, then we can say they are sold on a FIFO ( first in first out) basis. So we would consider the shares bought on October 3, 2020
so we have that
500 x $115=$57,500
$64,400 - $57,500 = $6,900
