Lucia owns 100 shares of Cronco Inc.which she purchased on December 1 of last year for $10,000.The stock is not Sec.1244 stock.On July 1 of the current year,Lucia receives notice from the bankruptcy court that Cronco Inc.has been liquidated,and there are no assets remaining for shareholders.As a result,Lucia will have
A)a short-term capital loss of $10,000.
B)a long-term capital loss of $10,000.
C)an ordinary loss of $10,000.
D)no loss allowed.

Question

Quizplus · Accepted Answer

Since Lucia owned the shares for more than one year, the loss she incurs is a long-term capital loss. She will be able to deduct this loss against any other capital gains she may have, up to a maximum of $3,000 per year. Any unused portion of the loss can be carried forward to future years.

Lucia Owns 100 Shares of Cronco Inc