It Is December 30th and You Have Stock in Zero

question 85

Multiple Choice

It is December 30th and you have stock in Zero Corporation,which you bought on March 1st that has lost $2,000 in value.You have already sold other stock that you bought this year for a gain.From a tax standpoint,what should you do with the Zero stock?

• A)Sell it today
• B)Sell it on January 2nd next year
• C)Wait until after next March 1st and sell it then
• D)Keep the stock and hope that it goes up in value

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Definitions:

Differential Cost

The difference in cost between two alternative decisions, or the change in costs resulting from an increase or decrease in output.

Differential Revenue

The variation in income resulting from choosing between two different options or time frames.

Differential Effect

The financial impact of a business decision that results in changes to costs or revenue, compared to maintaining the status quo.

Book Value

The net value of a company's assets as recorded on the balance sheet, calculated as total assets minus intangible assets and liabilities.