In March 2000 Bubba bought 1000 shares HOG at 75 On 10 April

In March 2000, Bubba bought 1,000 shares HOG at $75. On 10 April 2000, HOG Split 2:1. On May 14, 2015 Bubba sold 1,000 shares of HOG at $42 What is Bubba\'s gain or loss on the sale?

Income Tax

Solution

Bubba had $75000 in 1000 shares

iIt split 2:1, so he had 1500 shares of $75000

He sold 1000 shares at $42000

So, he sold a stock worth $75*2/3 = $50 at $42.

So, Bubba\' $8 per stock loss on the sale.

Therefore, total loss in the sale of 1000 shares is $8000