1) Joy purchased 200 shares of HiLo Mutual Fund on July 15, 2009, for $10,500, and has been reinvesting

dividends. On December 15, 2013, she sells 100 shares.

Amount No. of shares

Purchase July 15, 2009 $10,500 200

Reinvested dividends, Oct 1, 2010 800 10

Reinvested dividends, Oct 1, 2011 970 20

Reinvested dividends, Oct 1, 2012 980 20

$ 13,250 $250

What is the basis for the shares sold assuming the FIFO cost method?

What is the basis for the shares sold assuming the average cost method?

2) During the current year, Paul, a single taxpayer, reported the following items:

Salary $75,000

Interest on original loan incurred to purchase home 14,000

Taxes on home 3,500

Revenue from hobby 5,000

Interest on home equity loan incurred to purchase hobby assets 800

Expenses of hobby 8,500

Compute Paul's taxable income for the year.

Need help with these problems. Kind of stuck.