Four years ago, Mrs. Beights purchased marketable securities for $75,000 cash. At the end of the current year, the FMV of the securities had plummeted to $4,000. Mrs. Beights may elect to recognize her $71,000 loss this year, even though she still owns the securities.

Question

Quizplus · Accepted Answer

Mrs. Beights cannot recognize the $71,000 loss for tax purposes until she actually sells the securities or they become completely worthless. Unrealized losses on securities that are still owned are not deductible.

Four Years Ago, Mrs