Problem 4-6

Calculation of Gain or Loss

John receives 200 shares of Chevron stock as a gift from his mother. The mother purchased the stock for $10,000 eight years ago and it is now worth $8,000 at the date of the gift.

a. If John sells the stock for $11,200, calculate the amount of the realized gain or loss on the sale.

b. If John sells the stock for $7,500, calculate the amount of the realized gain or loss.

C.

If John sells the stock for $9,000, calculate the amount of the realized gain or loss