Sam Shoeman, a calendar year taxpayer, purchased stock in Eaton Corporation on July 12, 2012, for $2,500. On December 12, 2012, Eaton went bankrupt. What is Sam's 2012 loss?

Question

Quizplus · Accepted Answer

the holding period of worthless securities is extended to the last day of the taxable year in which the securities become worthless. In this case, the period from July 12, 2012 to December 31, 2012, is less than 12 months, so it would be short-term capital loss.

Sam Shoeman, a Calendar Year Taxpayer, Purchased Stock in Eaton