Question
In 2019, Mr. Dale paid $48,000 for 3,000 shares of GKL Mutual Fund and elected to reinvest his year-end dividends in additional shares. In 2019
In 2019, Mr. Dale paid $48,000 for 3,000 shares of GKL Mutual Fund and elected to reinvest his year-end dividends in additional shares. In 2019 and 2020, he received Form 1099s reporting the following:
| Dividends Reinvested | Shares Purchased | Price per Share | Total Shares Owned | |
|---|---|---|---|---|
| 2019 | $4,350 | 335 | $12.985 | 3,335 |
| 2020 | 5,003 | 392 | 12.763 | 3,727 |
Assume the taxable year is 2021.
Required:
- If Mr. Dale sells his 3,727 shares for $20 per share, compute his recognized gain.
- If he sells only 950 shares for $20 per share and uses the FIFO method to determine basis, compute his recognized gain.
- If he sells only 950 shares for $20 per share and uses the average basis method, compute his recognized gain.
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Accounting and auditing research tools and strategies
Authors: Thomas Weirich, Thomas Pearson, Natalie Tatiana
8th edition
9781118806487, 1118027078, 1118806484, 978-1118027073
