A security that was purchased by an individual and qualifies as § 1244 stock becomes worthless.The taxpayer is single and the loss is $30,000.The loss is treated as an ordinary loss.

Question

Quizplus · Accepted Answer

If stock qualifies as § 1244 stock and becomes worthless, the taxpayer may treat the loss as an ordinary loss up to a maximum of $50,000 ($100,000 if married filing jointly). Since the loss in this scenario is $30,000 and the taxpayer is single, it would be treated as an ordinary loss.

A Security That Was Purchased by an Individual and Qualifies