Before consideration of stock sales,Rex has generated $150,000 of AGI this year due to salary,interest income and dividends.Rex is a single taxpayer.He plans to sell his shares of Trisco Inc. ,a qualifying small business corporation under Sec.1244,realizing a $110,000 loss.Due to the sale of the stock,he will reduce his AGI by
A)$3,000.
B)$110,000.
C)$50,000.
D)$53,000.

Question

Quizplus · Accepted Answer

D)The sale of the Sec.1244 stock will result in a $50,000 ordinary loss and a $60,000 capital loss.He will recognize the full $50,000 loss,but will be limited to recognition of $3,000 of the capital loss.

Before Consideration of Stock Sales,Rex Has Generated $150,000 of AGI