On February 20, 2016, Bill Purchased Stock in Pink Corporation

question 70

Multiple Choice

On February 20, 2016, Bill purchased stock in Pink Corporation (the stock is not small business stock) for $1,000. On May 1, 2017, the stock became worthless. During 2017, Bill also had an $8,000 loss on § 1244 small business stock purchased two years ago, a $9,000 loss on a nonbusiness bad debt, and a $5,000 long-term capital gain. How should Bill treat these items on his 2017 tax return?

• A)$4,000 long-term capital loss and $9,000 short-term capital loss.
• B)$4,000 long-term capital loss and $3,000 short-term capital loss.
• C)$8,000 ordinary loss and $3,000 short-term capital loss.
• D)$8,000 ordinary loss and $5,000 short-term capital loss.
• E)$8,000 long-term capital loss and $6,000 short-term capital loss.

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Definitions:

Adaptation

The process by which organisms become better suited to their environment through genetic changes over generations.

Gravity

The natural force of attraction exerted by a celestial body, such as Earth, upon objects, drawing them toward its center.

Animal Movement

The various motions accomplished by animals as a result of muscle contraction.

Swim

The act of moving through water by the use of limbs, tail, or other bodily mechanisms, a common form of locomotion among aquatic organisms.