Question

Kevin bought 200 shares of Intel stock on January 1, 2017 for $50 per share with a brokerage fee of $100. Then, Kevin sells all 200 shares for $75 per share on December 12, 2017. The brokerage fee on the sale was $150. What is the amount of the gain/loss Kevin must report on his 2017 tax return?

A) $4,500
B) $4,750
C) $5,000
D) $5,250
E) None of the choices are correct.

Answer 1

Kevin must report a gain/loss of $4,750 on his 2017 tax return.

Step-by-step explanation:

To calculate the gain/loss Kevin must report on his 2017 tax return, you need to determine the total cost of purchasing the shares and the total proceeds from selling the shares.

Total cost of purchasing the shares = (number of shares * purchase price per share) + purchase brokerage fee = (200 * $50) + $100 = $10,100

Total proceeds from selling the shares = (number of shares * selling price per share) - selling brokerage fee = (200 * $75) - $150 = $14,850

To calculate the gain/loss, subtract the total cost from the total proceeds: $14,850 - $10,100 = $4,750

Therefore, the amount of gain/loss Kevin must report on his 2017 tax return is $4,750.