Al,who is single,has a gain of $20,000 on the sale of §1244 stock (small business stock)and a loss of $80,000 on the sale of § 1244 stock.As a result,Al has a $10,000 net capital loss and a $50,000 ordinary loss.

Question

Quizplus · Accepted Answer

Under §1244, losses on small business stock can be treated as ordinary losses up to $50,000 for individuals, with the remainder treated as a capital loss. Al's $80,000 loss results in a $50,000 ordinary loss and a $30,000 capital loss, which, when offset by the $20,000 gain, results in a $10,000 net capital loss.

Al,who Is Single,has a Gain of $20,000 on the Sale