Question

John bought 1,000 shares of Intel stock on October 18, 2014, for $30 per share plus a $750 commission he paid to his broker. On December 12, 2017, he sells the shares for $42.50 per share. He also incurs a $1,000 fee for this transaction.

What is John's adjusted basis in the 1,000 shares of Intel stock?

Answer 1

$30,750

Step-by-step explanation:

Given that,

Shares purchased = 1,000 shares of Intel stock

Price per share = $30

Commission paid to broker = $750

John's adjusted basis:

= Purchase price + Commission paid to broker

= (No. of shares purchased × Price per share) + $750

= 1,000 × $30 + $750

= $30,750