Question

Marc purchased 100 shares of LXM stock for $25 per share and sold this same stock two years later for $28 per share. He paid commissions of $50 when he purchased the stock and $55 when he sold the stock. No dividends were paid during the period he owned LXM. Marc's current income from this investment is ____, and his capital gains were ____.

Answer 1

Marc's current income from this investment is _$0_, and his capital gains were _$195_.

Step-by-step explanation:

Marc's basis = (100 shares x $25/share) + $50 = $2,500 + $50 = $2,550

His proceed = (100 shares x $28 per share) - $55 = $2,800 - $55 = $2,745

Marc's capital gain(loss) = $2,745 - $2,550 = $195

Marc's current income from this transaction = $0

Answer 2

Marc's current income from this investment is $0, and his capital gains were $195.

Step-by-step explanation:

Marc's basis for this investment = (100 shares x $25 per share) + $50 = $2,500 + $50 = $2,550

Two years later when Marc sold his investment, he received = (100 shares x $28 per share) - $55 = $2,800 - $55 = $2,745

Marc's capital gain = $2,745 - $2,550 = $195

Marc's current income from this transaction = $0, this transaction is not considered current income.