Efrain owns 1,000 shares of RJ Inc.common stock which he purchased three years ago for $36,000.Efrain sells the 1,000 shares on October 15,2016 for $10,000.On November 12,he purchases 400 shares of RJ Inc.preferred stock for $8,000.Efrain's recognized loss on the sale of the 1,000 shares will be

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Efrain's recognized loss is calculated by subtracting the sale price from the purchase price: $36,000 - $10,000 = $26,000. The purchase of preferred stock does not affect the recognition of the loss on the common stock.

Efrain Owns 1,000 Shares of RJ Inc