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On September 3,2009,Able Purchased § 1244 Stock in Red Corporation

Question 41

Multiple Choice

On September 3,2009,Able purchased § 1244 stock in Red Corporation for $6,000.On December 31,2009,the stock was worth $8,500.On August 15,2010,Able was notified that the stock was worthless.How should Able report this item on his 2009 and 2010 tax returns?


A) 2009-$0;2010-$6,000 ordinary loss.
B) 2009-$0;2010-$6,000 long-term capital loss.
C) 2009-$2,500 short-term capital loss;2010-$8,500 short-term capital loss.
D) 2009-$2,500 short-term capital gain;2010-$3,800 ordinary loss.
E) None of the above.

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