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Rayyan Kouri purchased 1000 shares in TRI Co. in 2019 for $5 per share. Due...

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Accounting

Rayyan Kouri purchased 1000 shares in TRI Co. in 2019 for $5 per share. Due to a decline in market value Rayyan sold the shares on September 22, 2020, when they were trading for $3 per share. On October 3, 2020, Rayyan repurchased 1000 shares of Y Co. at $2.50 per share. Which of the following is true for Rayyan?

Multiple Choice

  • Rayyan can recognize a $2,000 superficial loss on the sale of the shares in the 2020 tax year.

  • Rayyan can recognize a $2,000 capital loss on the sale of the shares in the 2020 tax year.

  • The adjusted cost base of Rayyan's new shares is $2,500.

  • The adjusted cost base of Rayyan's new shares is $4,500.

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