Problem:
Ms. Lunai is single and expects her 2003 taxable income to be $60,000. On October 1, 2003, she purchased 100 shares of Skyrocket Inc. for $10 per share. On December 15, 2003, the stock traded at $15 per share. Ms. Lunai is considering whether to sell the stock before year-end or hold onto it in anticipation of further appreciation.