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Tom Ftompson Sells Shares of Section 1244 Stock for $50,000

Question 94

Multiple Choice

Tom ftompson sells shares of Section 1244 stock for $50,000. He purchased the stock years ago for $175,000. How is the loss treated on Tom's tax return if he files a joint tax return with his spouse?


A) $125,000 ordinary loss.
B) $100,000 ordinary loss; $25,000 long-term capital loss.
C) $25,000 ordinary loss; $100,000 long-term capital loss.
D) $125,000 short-term capital loss.
E) $125,000 long-term capital loss.

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