marketable securities are sold above cost
When marketable securities are sold above their cost, it means that the selling price of those securities is higher than their original purchase price.
To calculate the gain on the sale of marketable securities, you need to know the cost basis (purchase price) and the selling price. Here are the steps to determine the gain:
1. Determine the cost basis: Identify the original purchase price of the marketable securities. This amount represents the cost basis or the initial investment.
2. Determine the selling price: Find out the price at which the marketable securities were sold. This is the price at which the securities are being sold above cost.
3. Calculate the gain: Subtract the cost basis from the selling price to determine the gain. The formula for calculating the gain is: Gain = Selling Price - Cost Basis.
If the resulting gain is positive, it means that the marketable securities were sold above cost. This generally indicates a profit or a capital gain on the investment made. Conversely, if the gain is negative, it indicates a loss or a capital loss on the investment.
It's worth noting that selling marketable securities above cost may have tax implications and should be considered in accordance with relevant tax regulations and guidelines.