Question

Deirdre sold 100 shares of stock to her brother, James, for $2,400. Deidre purchased the stock several years ago for $3,000. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) a. What gain or loss does Deirdre recognize on the sale

Answer 1

$0

Step-by-step explanation:

The computation of the gain or loss realized is shown below:

= Sale price of stock - purchase price of the stock

= $2,400 - $600

= - $600

Since there is a loss of - $600 but this loss is not recognized as it reflects the related party transaction. Since the Deirdre sold the shares to her brother with comes under the related party transactions. So, no loss or gain would be recognized