Ralph and Yolanda Purchased 20% of the Initial Offering of Major

question 99

Multiple Choice

Ralph and Yolanda purchased 20% of the initial offering of Major Corporation common stock for $150,000. Major Corporation is a qualifying small business corporation and the stock qualifies as Sec. 1244 stock. Ten months later, Major Corporation files for bankruptcy and the shareholders are notified that the stock is worthless. Ralph and Yolanda, who are married and file a joint return, have a

• A)$150,000 ordinary loss.
• B)$150,000 capital loss.
• C)$100,000 ordinary loss; $50,000 capital loss.
• D)$100,000 ordinary loss; $50,000 ordinary loss carryforward.

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Definitions:

Certain Traits

Specific characteristics or attributes that are distinctive to an individual or species.

Reinforcement

In psychology, a process by which a behavior is strengthened or made more likely to occur again, typically through rewards or positive outcomes.

Publicly Praising

The act of expressing approval or admiration in a public setting.

Signalling Theory

A theoretical framework explaining how communication between individuals or entities carries information that influences behaviors.