Final answer:
The $15,000 Amount Realized from selling stock includes any capital gain— the increase in the asset's value since purchase. If transaction fees apply, these are also subtracted to determine the actual profit.
Step-by-step explanation:
When Dave sells common stock for $15,000 (Amount Realized) and had purchased the stock for $12,000 (Basis) two years ago, the $15,000 Amount Realized consists of the capital gain on the investment and possibly transaction fees if they apply. A capital gain is the increase in value of an asset between when it is bought and when it is sold. To calculate the profit from selling stocks, you subtract the buying price and any transaction fees from the selling price.
For example, let's consider a scenario where someone buys 800 shares of stock at $19.50 per share, with a $10 transaction fee, and later sells the shares at $34.50 per share. The profit calculation would be as follows: (800 shares × $34.50 per share) - (800 shares × $19.50 per share) - (2 × $10 transaction fee) = profit.