LO.5 On May 5, 2012, Samantha sells her stock (adjusted basis of $45,000) in Rose, Inc., a publicly traded company, for $60,000. On May 31, 2012, she pays $65,000 for stock in Lime, Inc., a specialized small business investment company. Samantha believes that her adjusted basis for the Lime stock is $45,000.

a. Evaluate Samantha’s calculation of the adjusted basis for her Lime stock.

b. How would your answer change if Samantha purchased the replacement stock on July 15 rather than May 31?