On May 5, 2012, Samantha sells her stock (adjusted basis of $45,000) in Rose, Inc., a publicly...

Question

On May 5, 2012, Samantha sells her stock (adjusted basis of $45,000) in Rose, Inc., a publicly traded company, for $60,000. On May 31, 2012, she
pays $65,000 for stock in Lime, Inc., a specialized small business investment company. Samantha believes that her adjusted basis for the Lime stock is
$45,000.

a. Evaluate Samantha’s calculation of the adjusted basis for her Lime stock.

b. How would your answer change if Samantha purchased the replacement stock on July 15 rather than on May 31?

Robert · Accepted Answer

a. Evaluated Samantha’s calculation of the adjusted basis for her Lime stock. 
Samantha’s adjusted basis for the Lime, Inc., stock is $16,000. Samantha sold publicly traded 
securities (Rose, Inc.) and reinvested the proceeds in the common stock of a specialized small 
business investment company (Lime, Inc.) within 60 days of the date of sale of the Rose, Inc.,

On May 5, 2012, Samantha sells her stock (adjusted basis of $45,000) in Rose, Inc., a publicly traded company, for $60,000. On May 31, 2012, she pays $65,000 for stock in Lime, Inc., a specialized...

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