Please complete the 2014 federal income tax return for Joseph and Diana Cohen Th
ID: 2746296 • Letter: P
Question
Please complete the 2014 federal income tax return for Joseph and Diana Cohen
The Cohens did not own, control or manage any foreign bank accounts nor were they a grantor or beneficiary of a foreign trust during the tax year.
The Cohens had the following activity in their brokerage account during the year (all transactions were reported on a Form 1099-B. Basis information on each stock sale was reported to the IRS):
Sold 2,000 shares of Microsoft 7/1/14 $22,500
Sold 75 shares of Apple, Inc. 4/15/14 $28,750
Sold 350 shares of Cooper Tire 10/14/14 $14,700
Sold 1,000 shares of Cardinal Health 9/3/14 $35,000
Sold 50 shares of Union Pacific 1/7/14 $2,750
Purchased 100 shares of Procter & Gamble 7/10/14 $7,700
Purchased 350 shares of Cooper Tire 11/1/14 $14,000
Purchased 350 shares of PepsiCo 5/14/14 $32,000
Purchased 300 shares of Kellogg 10/14/14 $21,000
Relevant tax basis/holding period information related to sales of securities in the current year:
Purchased 2,000 shares of Microsoft on 5/1/14 for $21,000
Purchased 200 shares of Apple, Inc. on 3/8/2012 for $90,000
Purchased 300 shares of Cooper Tire on 1/12/2011 for $9,000
Purchased 50 shares of Cooper Tire on 6/28/14 for $2,000
Received 1,000 shares of Cardinal Health from Diana’s father as a gift on 10/10/98. Her father’s basis in the stock at the time of the gift was $7,000. Fair market value of the stock at the date of the gift was $41,000
Purchased 100 shares of Union Pacific on 9/5/13 for $6,000
The Cohens have a $43,000 long-term capital loss carryover from their prior tax year.
Explanation / Answer
Form 1099 B
Payer Name and address, city Town, zipcode:
Joseph and Diana Cohen:
Short-Term Capital Gains and Losses
Particulars ::::::::::: Sales Date::::::Sales price:::::::::Purchase Date:::::Cost Price:::::::::::Profit / -loss
Microsoft shares:::::: 7/1/14:::::::: $22,500:::::::::::::::::::5/1/14::::::::::::$21,000::::::::::::::::$1,500
Cooper Tire::::::::::::::::10/14/14:::::$2,000:::::::::::::::::::: 6/28/14:::::::::::$2,000::::::::::::::::::$100
Union Pacific:::::::::::::::1/7/14:::::::: $2,750:::::::::::::::::: 9/5/13::::::::::::$3,000:::::::::::::::::-$250
________________________________________________________________________________
Net short term capital gain::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::$1,350
Long-Term Capital Gains and Losses
Particulars ::::::::::: Sales Date::::::Sales price:::::::::Purchase Date:::::Cost Price:::::::::::Profit / -loss
Apple::::::::::::::::::: 4/15/14 ::::::::::: $28,750::::::::::::: 3/8/2012 :::::::::::::::$33,750:::::::::::: -5,000
Cooper Tire::::::::::10/14/14:::::::::::$12,600::::::::::::::1/12/2011:::::::::::::::: $9,000::::::::::::: 3,600
Cardinal Health:::::: 9/3/14::::::::::::: $35,000:::::::::::: 10/10/98:::::::::::::::: $41,000::::::::::::: -$5,000
________________________________________________________________________________
LOng short term capital LOss :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::-$6,400
________________________________________________________________________________
Net short term capital gain=$1,350
LOng short term capital LOss=-$6,400
long-term capital loss carryover =$3,000(out of $43,000)
But in this case no, long term gain to deduct the caryyover loss.
Calculation:
Apple, Inc=$90,000/ 200=$450 per share *75=$33,750
Cooper Tire =$14,700 /350=$42 per share *50=$2,100(short)
Cooper Tire =$14,700 /350=$42 per share*300=$12,600(long)
Union Pacific = $2,750 / $50=$55 : 6,000 /100=60*50 shares=$3000
__________________________________________________________________________________________
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