3 PARTS TO THIS PROBLEM 1 (20 points) Part A. (5 points) On June 1st of the current year Jay sells 100 shares of Smith stock for a total sales price of $100,000 to an unrelated party. He paid $125,000 for the stock he has owned for 10 years. On June 21st of the current year, Jay repurchases 100 shares of the same Smith stock for a total cost of $105,000. On December 10th of the current year, Jay sells all 100 shares of Smith stock (from the most recent purchase) for $110,000. Jay had no other stock transactions during the current year. Required: Determine Jay's gain or loss realized and recognized on both stock sales. Show Your Work. Part B. (5 points) Kay has a tract land with an adjusted basis of $1,000,000 that has been in the family for many years. Her brother, Zed, always wanted the tract of land and Kay agrees to sell him the land for its fair market value of $400,000. Kay also has a large capital gain that she wants to offset with the loss on the land sale. What is Kay's loss realized and loss recognized? Explain. Part C. (10 points) Zed from Part B built his house (3 bedrooms, kitchen and 2 bathrooms) on the land he bought from Kay. He also rents the house to hunters during hunting season. Zed uses the house as a summer home. During the current year Zed used the house for 21 days. Zed rented the house for 150 days of the year at fair market rent to hunters that are unrelated to him. The rental activity generated a net loss for the year of $15,000. Ignoring the passive loss rules of Section 469, how much loss can Zed claim? Explain. 3 PARTS TO THIS PROBLEM 1 (20 points) Part A. (5 points) On June 1st of the current year Jay sells 100 shares of Smith stock for a total sales price of $100,000 to an unrelated party. He paid $125,000 for the stock he has owned for 10 years. On June 21st of the current year, Jay repurchases 100 shares of the same Smith stock for a total cost of $105,000. On December 10th of the current year, Jay sells all 100 shares of Smith stock (from the most recent purchase) for $110,000. Jay had no other stock transactions during the current year. Required: Determine Jay's gain or loss realized and recognized on both stock sales. Show Your Work. Part B. (5 points) Kay has a tract land with an adjusted basis of $1,000,000 that has been in the family for many years. Her brother, Zed, always wanted the tract of land and Kay agrees to sell him the land for its fair market value of $400,000. Kay also has a large capital gain that she wants to offset with the loss on the land sale. What is Kay's loss realized and loss recognized? Explain. Part C. (10 points) Zed from Part B built his house (3 bedrooms, kitchen and 2 bathrooms) on the land he bought from Kay. He also rents the house to hunters during hunting season. Zed uses the house as a summer home. During the current year Zed used the house for 21 days. Zed rented the house for 150 days of the year at fair market rent to hunters that are unrelated to him. The rental activity generated a net loss for the year of $15,000. Ignoring the passive loss rules of Section 469, how much loss can Zed claim? Explain