Investment Income

Benicio purchased stock shares many years ago. His records were destroyed, and he does not know exactly when the purchase was made or what he paid. He sold the shares for $10,000 in 2022. If he is unable to verify what the original basis was, what is his taxable gain?


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Grayson purchased his primary residence for $260,000. As part of the closing procedure, he paid $2,900 in loan origination fees, $750 to a lawyer to review the purchase contract and other closing papers, $250 for a property survey, and $1,200 for title insurance. He also gave the real estate agent a $100 gift certificate in appreciation for her hard work. What is Grayson’s basis in the residence?





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Investment Income


Jeremiah converted $2,000 into Bitcoin in November 2021. In October 2022, when the value of his holding had increased to $3,500, Jeremiah decided to purchase a watch using Bitcoin. He spent the entire holding on the watch. How will Jeremiah report this on his tax return?

No reporting is necessary until he sells the watch. At that time, he will report a gain or loss, depending on the sale price of the watch.

As a short-term capital gain of $2,000 on Form 8949. His basis in the watch is $3,500.

As $3,500 in ordinary income.

No reporting is necessary when purchases are made using virtual currency.

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