In September of 2018, Michelle Sold Shares of Qualified Small

question 2212

Multiple Choice

In September of 2018, Michelle sold shares of qualified small business stock for $1,000,000 that had a basis of $200,000. She had held the stock for 17 months. Forty- five days after the sale she purchased other qualified small business stock for $1,100,000. How much of the gain will she recognize?

• A) $0
• B) $900,000
• C) $800,000
• D) $100,000

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Definitions:

American Taxpayers

Citizens and entities in the United States responsible for paying taxes to federal, state, and local governments, contributing to public services and infrastructure.

S & L Debacle

Refers to the financial crisis involving Savings and Loan associations in the United States during the 1980s, leading to significant regulatory changes and economic impacts.

Transaction Motive

The need to hold money for the purpose of conducting everyday transactions.

Precautionary Cash

Funds held by individuals or firms to deal with unexpected events or emergencies, providing a buffer against financial issues.