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tangare [24]
3 years ago
9

In January, Lance sold stock with a cost basis of $26,000 to his brother, James, for $24,000, the fair market value of the stock

on the date of sale. Five months later, James sold the same stock through his broker for $27,000. What is the tax effect of these transactions?
Business
1 answer:
Alika [10]3 years ago
4 0

Answer:

For Lance:

short-term capital loss for 2,000

For James:

short-term capital gain for 3,000

Explanation:

As the stocks weren't held for more than a two-year period, these are considered short-term gain. Thus; taxes at the same income bracket as teh seller.

Lance will have a deducion for 2,000

While James will pay taxes for 3,000

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