T was granted one right for each share of stock that she owned.She elected to allocate basis to the stock rights.T was unwilling to exercise the rights to buy new stock because of the outlook for the company, and consequently they lapsed.Despite her views on the company's future, she continued to hold her original stock.She is not allowed to deduct a loss equal to the basis assigned to the rights.

Question

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According to the information given, T allocated basis to the stock rights but did not exercise them, resulting in their lapse. However, T continued to hold her original stock. Since T did not sell her original stock and incur a loss, she is not allowed to deduct a loss equal to the basis assigned to the rights. This is in accordance with the tax rules for stock rights.

T Was Granted One Right for Each Share of Stock