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# Valuing Stocks

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Homework

1) Sybil gave her son Todd 1,000 shares of XYZ stock on January 16, 2007. The
stock's high and low selling prices that day were \$55 and \$53. Sybil had purchased the
stock in 2006 for \$70 per share. At the beginning of 2008, Todd sold the shares for
\$62,000. Provide the details of both income and gift tax effects for these events.

2) William has decided to purchase a large apartment complex. He pays \$100,000
cash, obtains a loan on the property for \$500,000, and assumes the first mortgage
balance of \$250,000. He also gives the sellers \$100,000 of marketable securities that he
purchased three years ago for \$125,000 and paid a finder's fee of \$5,000, legal fees of
\$6,000, and transfer taxes of \$12,000. What is William's acquisition basis for the
building? Does he have any other tax consequences as a result of this purchase?

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#### Solution Summary

The expert examines valuing stocks.

\$2.19