Brian Bradley is a calendar year tax payer. He purchased 1,000 shares of Newton Corporation stock for $15,000 on October 23, 2013. On January 17, 2014 he sold the shares for $7,000. Brian purchased 500 shares of substantially identical stock for $3,000 on each of the four days between January 20 and January 23, 2014.

Specific Issue:

What is the tax effect for Brian? What will be the basis of each of the four batches of new stock?