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Determining the Nature and Amount of A Capital Gain

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Martin sells a stock investment for $25,000 on August 2, 2008. Martin's adjusted basis in the stock is $14,000.

a. If Martin acquired the stock on November 15, 2007, calculate the amount and the nature of the gain or loss. $__________________

b. If Martin had acquired the stock on September 11, 2006, calculate the amount and nature of the gain or loss. $_____________________________.

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Solution Summary

This solution illustrates how to determine the nature and amount of a capital gain for tax purposes.

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a. Because only about 8.5 month will have elapsed between the time he purchased the stock ...

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