Bennett, Who Is Single, Owns All of the Outstanding Stock

question 76

Multiple Choice

Bennett, who is single, owns all of the outstanding stock of Bennett Company. In 2017 Bennett sells all of his stock in the company for $30,000. If the stock qualifies as Section 1244 and his basis in the stock is $140,000, how is his loss on the sale classified for tax purposes?

• A) $110,000 capital loss
• B) $110,000 ordinary loss
• C) $60,000 capital loss; $50,000 ordinary loss
• D) $100,000 ordinary loss; $10,000 capital loss
• E) None of the above

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