On September 3, 2016, Able, a Single Individual, Purchased §

question 69

Multiple Choice

On September 3, 2016, Able, a single individual, purchased § 1244 stock in Red Corporation from his friend Al for $60,000. On December 31, 2016, the stock was worth $85,000. On August 15, 2017, Able was notified that the stock was worthless. How should Able report this item on his 2017 tax return?

• A)$85,000 capital loss.
• B)$85,000 ordinary loss.
• C)$50,000 ordinary loss and $35,000 capital loss.
• D)$60,000 ordinary loss.
• E)None of the above.

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Definitions:

Cramér's V

A measure of association between two nominal variables, providing a value between 0 and 1.

Nonparametric Statistical Tests

Statistical tests that do not involve the estimation of population parameters or the assumption that scores for a variable are normally distributed in the larger population.

Chi-square Statistics

A statistical measure used to analyze the differences between categorical variables in a contingency table.

Degrees of Freedom

The amount of separate values or quantities that can be attributed to a statistical distribution.