Accounting Investor owns 1,000,000 shares of stock of Corp. XYZ with a zero basis and a FMV of 100,000,000 that the investor has held for 20 years. The investor sells 1,000,000 shares of XYZ short for $100,000,000 in February 2019. In July 2020 when the stock is worth $150,000,000, the investor delivers the shares it is holding to close out the short sale. What are the tax consequences in 2019 and 2020?
Accounting Investor owns 1,000,000 shares of stock of Corp. XYZ with a zero basis and a FMV of 100,000,000 that the investor has held for 20 years. The investor sells 1,000,000 shares of XYZ short for $100,000,000 in February 2019. In July 2020 when the stock is worth $150,000,000, the investor delivers the shares it is holding to close out the short sale. What are the tax consequences in 2019 and 2020?
Chapter13: Property Transact Ions: Determination Of Gain Or Loss, Basis Considerations, And Nontaxable Exchanges
Section: Chapter Questions
Problem 14DQ
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Accounting
- Investor owns 1,000,000 shares of stock of Corp. XYZ with a zero basis and a FMV of 100,000,000 that the investor has held for 20 years. The investor sells 1,000,000 shares of XYZ short for $100,000,000 in February 2019. In July 2020 when the stock is worth $150,000,000, the investor delivers the shares it is holding to close out the short sale. What are the tax consequences in 2019 and 2020?
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