Answer:
The correct option is C, no loss last year and a $4000 loss this year
Step-by-step explanation:
The task here is to ascertain the gain or loss on Greg entire 100 shares in Parker Corporation with a basis of $20,000.
To start with, Greg cannot with certainty determine whether a loss or gain has occurred until the total proceeds from the shares is known,hence upon receipt of $8000, no gain or loss can be computed.
Finally,by receiving additional $8000 in current year, it is now crystal clear that the total amount realized is $16,000, as a result ,Greg has lost $4000 on the investment(Proceeds less basis amount).
Proceeds ($8000*2) $16,000
Basis ($20,000)
Loss on shares ($4,000)