What is Simon’s realized and recognized loss, respectively, on the March 1 stock sale?

507 unit 5 | Business & Finance homework help

Simon’s realized loss on the March 1 stock sale is $6,000. This is calculated by subtracting the purchase price of the stock ($15,000) from the selling price ($9,000), resulting in a negative difference of $6,000.

The recognized loss refers to any capital losses that are reported for tax purposes and can be reduced or eliminated through various strategies such as offsetting against gains elsewhere or with carryforward/carryback provisions. In this case, Simon’s recognized loss would also be $6,000 since he did not make use of any of these strategies and there were no other gains to offset against this particular transaction. This amount could potentially be claimed as a deduction on his taxes if he meets certain criteria such as having taxable income over this amount and all relevant documentation ready to provide when filing his return.

In summary, Simon’s realized and recognized losses were both equal to $6,000 on his March 1 stock sale of ABC shares which had been purchased three months prior for $15,000 but sold for a much lower price of $9,000.