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Sadie sold 12 shares of stock to her brother, George, for $700 16 months ago. Sadie had purchased the stock for $1,000 two years earlier. If George sells the stock for $1,300, what are the amount and character of his recognized gain or loss in the current year?

Respuesta :

Answer and Explanation:

The computation of the amount and character of his recognized gain or loss is as follows:

There is a gain of

= $1,300 - $1,000

= $300

This gain represents the long term capital gain as it is more than 12 months. If there is a gain that within the 12 months so it would be the short term capital gain

So, the amount and character would be $300 and long term capital gain

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