Challenge TasksThree weeks ago, Mike McGee left to join a larger company, and management decided to reorganize the IT department
1 answer:
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Answer: $603,500
Explanation:
Ending inventory in 2014;
= Ending inventory balance 2013 + (( * 100) - ending inventory 2013)) * Price index 2014/100
= 550,000 + (() - 550,000)) * 107/100
= $603,500
Answer: Gwen should report a $3,000 long-term capital gain in her income tax return.
In this question the price paid by Gwen’s mother for the shares is irrelevant because of her death.
The stock’s fair market value ($20) when Gwen inherited the shares (21st October 2015) is Gwen stepped up value.
Gwen’s gain from selling the shares is:
Gwen inherited the shares on (21st October 2015) and held the shares until (3rd july 2017), so she held the shares for more than one year after inheriting it. So, she will report a long-term capital gain on her income tax return.