During the year, Mr. Anderson sold publicly traded securities on the open market in the number of shares, on the dates and for the amounts set forth in the following table:

Description Date Sold Net Sales Proceeds

20,000 comm shares ABC, Inc 11-14-18 $247,000

10,000 comm shares JKL, Inc 9-27-18 $337,500

15,000 comm shares XYZ, Inc 9-26-18 $282,000

The shares were acquired by Mr. Anderson in the following manner:

- the ABC shares were received from Mr. Anderson's grandmother. as a result of her death on 7-13-18 with an FMV of $285,000. She originally acquired the shares on 9-10-17 as a gift from Mr. Anderson's wife. The wife paid $174,000.

- the JKL shares were purchased by Mr. Anderson, and were sold in two 5,000-share lots. One of the lots was used to cover a "short sale" of 5,000 shares of JKL stock that Mr. Anderson entered into on 8-28-18, giving him 30 days to close. 5,000 shares of JKL were shorted at $30/share on 8/28/18 and covered on 9/27/18 with 5,000 shares that were acquired on 9/27/18 at $37.50 per share. The other 5,000 shares of JKL were acquired on 9/12/2017 at $20 per share. They were sold on 9/24/18 for $37.50 per share

- the XYZ shares were purchased by Mr. Anderson on 6-16-18 for $60,000 plus convertible debentures.

Analyze each transaction and determine the appropriate tax treatment for Mr. Anderson.