Lynn transfers property (basis of $225,000 and fair market value of $300,000) to Condor Corporation in exchange for § 1244 stock. The transfer qualifies as a nontaxable exchange under § 351. In the current year, Lynn sells the Condor stock for $100,000. Assume Lynn files a joint return with her husband, Ricky. With respect to the sale, Lynn has:

Question

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Under § 1244, Lynn can claim an ordinary loss on the sale of the stock up to $100,000 (since she files a joint return), and the remaining $25,000 is a capital loss.

Lynn Transfers Property (Basis of $225,000 and Fair Market Value