In 2007, Gaylord Purchased 100 Shares of Stock of Chisel

question 59

Multiple Choice

In 2007, Gaylord purchased 100 shares of stock of Chisel Corporation for $200 per share. In 2018, Gaylord sells all of the shares for $19,000. What are the effects of these events?
I.The capital recovery concept prevents the recognition of any income.
II.Gaylord reports $1,000 of ordinary income for tax year 2018.
​

• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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