Asked • 04/03/25

Question 1: What is the gain or loss on the sale of the Coca Cola shares?

Basis per share:

Original basis- 500 shares

Number of splits- The 500 shares split multiple times, resulting in 24,000 shares.

Implied basis per share- $450,000 (total basis) / 24,000 (total shares) = $18.75 per share

Proceeds from the sale:

Sales price per share- $65 (assumed closing price)

Number of shares sold- 8,000

Gross proceeds- 8,000 shares * $65/share = $520,000

Broker fee- 2% of gross proceeds = $10,400

Net proceeds- $520,000 - $10,400 = $509,600

Gain or loss:

Basis of shares sold- 8,000 shares * $18.75/share = $142,000

Gain- $509,600 (Net proceeds) - $142,000 (Basis) = $367,600 long-term capital gain

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