LO.1, 2, 3 Finch, Inc., purchases 1,000 shares of Bluebird Corporation stock on October 3, 2010, for $200,000. On December 12, 2010, Finch purchases an additional 500 shares of Bluebird stock for $112,500. According to market quotations, Bluebird stock is selling for $240 per share on December 31, 2010. Finch sells 400 shares of Bluebird stock on March 1, 2011, for $100,000.

a. What is the adjusted basis of Finch’s Bluebird stock on December 31, 2010?

b. What is Finch’s recognized gain or loss from the sale of Bluebird stock on March 1, 2011, assuming the shares sold are from the shares purchased on December 12, 2010?

c. What is Finch’s recognized gain or loss from the sale of Bluebird stock on March 1, 2011, assuming Finch cannot adequately identify the shares sold?