Rosanna, a single taxpayer, owns 2,000 shares of qualifying small business stock that she purchased for $225,000. During the current year, she sells 800 of the shares for $30,000. If this is the only stock Rosanna sells during the year, what can she deduct as an ordinary and capital loss?

Ordinary loss Capital loss

Question

Rosanna, a single taxpayer, owns 2,000 shares of qualifying small business stock that she purchased for $225,000. During the current year, she sells 800 of the shares for $30,000. If this is the only stock Rosanna sells during the year, what can she deduct as an ordinary and capital loss?
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Ordinary loss Capital loss

Quizplus · Accepted Answer

Rosanna can deduct an ordinary loss of $50,000 and a capital loss of $3,000. The ordinary loss is limited to $50,000 for single taxpayers under Section 1244 stock rules, and the remaining loss is treated as a capital loss.

Rosanna, a Single Taxpayer, Owns 2,000 Shares of Qualifying Small