Solution-How much did johnny make from this transaction

How much did johnny make from this transaction

Reference no: EM132591205

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Q1. Taxpayer sells short 100 shares of BIG Corp on February 1, 20x1 for $10/share. On December 31, 20x1, the shares are worth $15/share. On July 1, 20x2, taxpayer purchases 100 shares of BIG Corp for $12/share to cover the original short sale.

What is the amount and character that taxpayer must recognize in 20x2?

a. $200 short-term capital loss

b. $200 long-term capital loss

c. $200 short-term capital gain

d. $200 long-term capital gain

Q2. Johnny buys 100 shares of ABC stock for $70 per shares on 2/1/2008. He then borrows 100 shares of ABC stock from his broker and sells the stock for $90 per share on 3/1/2008. On 3/18/2008, Johnny buys 100 shares of ABC stock at $75 per share. He pays $7,500 for the stock and returns the stock to the broker. The short sale is closed.

How much did Johnny make from this transaction and when does the holding period of the original shares of ABC stock begin to run?

a. $1,500, 3/18/08

b. $1,500, 3/1/08

c. $500, 3/18/08

d. $1,500, 2/1/08

Reference no: EM132591205

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How much did johnny make from this transaction

Reference no: EM132591205

Reference no: EM132591205

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