George bought and sold the following amounts of Washington C

George bought and sold the following amounts of Washington Corp stock: Purchased 1,000 shares purchased on November 21, 1991 for $24,000 Purchased 500 shares on November 29, 2018 for $10,500 Sold 800 of the shares purchased in 1991 on December 21, 2018 for $17,600 What is the basis of the shares George is holding at year end?

Solution

Computation of year end cost basis.

Of the 1000 shares purchased in 1991 800 shares are sold leaving 200 shares. Cost basis of 200 shares = Cost of 1000 Shares - Market Price of 800 Shares = $24000 - $17600 = $6900

Cost basis at the year end is $6900 + $10500 = $16900