Bob purchases 25,000 shares of common stock of Super Duper for $100,000. Exactly one year later when the stock is selling for $5 per share, Bob sells 5,000 shares for $25,000 and holds on to the remaining 20,000 shares. Which of the following statements is correct? a.) Bob has a realized capital gain of $4,000 and an unrealized capital gain of $1,000. b.)Bob has a realized capital gain of $5,000 and an unrealized capital gain of $20,000. c.)Bob has a $25,000 realized capital gain. d.)Bob has a $5,000 unrealized capital gain.

Bob purchases 25,000 shares of common stock of Super Duper for $100,000. Exactly one year later when the stock is selling for $5 per share, Bob sells 5,000 shares for $25,000 and holds on to the remaining 20,000 shares. Which of the following statements is correct? a.) Bob has a realized capital gain of $4,000 and an unrealized capital gain of $1,000. b.)Bob has a realized capital gain of $5,000 and an unrealized capital gain of $20,000. c.)Bob has a $25,000 realized capital gain. d.)Bob has a $5,000 unrealized capital gain.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter7: Losses—deductions And Limitations

Section: Chapter Questions

Problem 62P

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