Chana Purchased 400 Shares of Tronco Corporation Stock for $40,000 $$\begin{array} { |l | l| } \hline \text { Recognized Loss } & \text { Basis } \\\hline \$ 0 & \$ 32,000\\\hline\end{array}$$

question 103

Multiple Choice

Chana purchased 400 shares of Tronco Corporation stock for $40,000 in 2014.On December 27,2019,Chana sells the 400 shares for $24,000.Chana purchases 300 shares of Tronco Corporation stock on January 16,2020 for $8,000.Chana's recognized loss on sale of the 400 shares in 2019 and her basis in her 300 new shares are

• A) \[\begin{array} { |l | l| }
• \hline \text { Recognized Loss } & \text { Basis } \\
• \hline \$ 0 & \$ 32,000\\\hline
• \end{array}\]
• B) \[\begin{array} {| l | l| }
• \hline \text { Recognized Loss } & \text { Basis } \\
• \hline \$ 4,000 & \$ 20,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} {| l | l| }
• \hline \text { Recognized Loss } & \text { Basis } \\
• \hline \$ 12,000 & \$ 20,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { |l | l| }
• \hline \text { Recognized Loss } & \text { Basis } \\
• \hline \$ 16,000 & \$ 8,000 \\
• \hline
• \end{array}\]

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Definitions:

Importing

The process of importing products or services from other countries for the purpose of selling them domestically.

High-Opportunity Cost

A situation where choosing one option results in the loss of the potential gain from other alternatives.

Low-Opportunity Cost

Refers to a situation where choosing one option results in the smallest possible sacrifice in terms of the value of the next best alternative.

Appreciates

When the value of an asset or currency increases in value in comparison to another currency or benchmark.