A worthless security had a holding period of 11 months when it became worthless on November 10,2010.The investor who had owned the security had a basis of $10,000 for it.Which of the following statements is correct?

Question

Quizplus · Accepted Answer

When a security becomes worthless, it is treated as if it was sold on the last day of the tax year. Since the holding period was 11 months, it is considered long-term because it is treated as if it was held for more than a year.

A Worthless Security Had a Holding Period of 11 Months