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ms. fresh bought 1,000 shares of ibis corporation stock for $5,900 on january 15, 2019. on december 31, 2022, she sold all 1,000 shares of her ibis stock for $4,950. based on a hot tip from her friend, she bought 1,000 shares of ibis stock on january 23, 2023, for $3,225. what is ms. fresh's recognized loss on her 2022 sale, and what is her basis in her 1,000 shares purchased in 2023?

Answer :

The recognized loss on her 2022 sale is $0. The basis of her 1000 shares purchased in 2023 is $4175.

$5,900 in Ibis shares minus the $4,950 from the sale of Ibis stock results in a realized loss of $950. Because the Ibis shares were repurchased within 30 days of the first sale, the loss is currently not deductible.                $3,225 in new Ibis share purchase price plus $950 non-deductible loss from the initial Ibis sale equals $4,175 in basis for the new Ibis shares.

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