a. Being an avid fisherman, Bryce develops an expertise in tying flies. At times during the year, he is asked to conduct fly-tying demonstrations, for which he is paid a small fee. He also periodically sells flies that he makes. Income generated from these activities during the year is $2,500. The expenses for the year associated with Bryceâ€™s fly-tying activity include $125 personal property taxes on a small trailer that he uses exclusively for this purpose, $2,900 in supplies, $270 in repairs on the trailer, and $200 in gasoline for traveling to the demonstrations.
b. Bryce sells a small building lot to his brother for $40,000. Bryce purchased the lot four years ago for $47,000, hoping to make a profit.
c. Bryce enters into the following stock transactions: (None of the stock qualifies as small business stock.)
March 22 Purchases 100 shares of Silver Corporation common stock for $2,800.
April 5 Sells 200 shares of Gold Corporation common stock for $8,000. The stock was originally purchased two years ago for $5,000.
April 15 Sells 200 shares of Silver Corporation common stock for $5,400. The stock was originally purchased three years ago for $9,400.
May 20 Sells 100 shares of United Corporation common stock for $12,000.
The stock was originally purchased five years ago for $10,000.
d. Bryceâ€™s salary for the year is $115,000. In addition to the items above, he also incurs $5,000 in other miscellaneous deductible itemized expenses.
Answer the following questions regarding Bryceâ€™s activities for the year.
1. Compute Bryceâ€™s taxable income for the year.
2. What is Bryceâ€™s basis in the Silver stock he continues to own?