LO.5, 6 On December 18, 2012, Amber sells 500 shares of John Deere stock for a realized loss of $5,000. On January 8, 2013, Amber purchases 500 shares of John Deere stock for $8,000 more than she received on the December sale.

a. Why is Amber’s December realized loss of $5,000 disallowed?

b. How does Amber calculate the basis of the 500 shares purchased in January 2013?

c. What could Amber have done differently to enable her to recognize the $5,000 loss in 2012?