N Corporation Was Formed by L in 2003, Issuing $2

question 40

Multiple Choice

N Corporation was formed by L in 2003, issuing $2 million in stock.Several years ago, M was admitted as a new shareholder, receiving 100 shares of stock and a note in exchange for property.The stock and note have a basis of $30,000 and $40,000, respectively.On October 5 of the current year, the corporation declared bankruptcy, and the stock and note became worthless.How much may M deduct on her individual return for this year?

• A)$70,000, if married status
• B)$50,000, if single status
• C)$73,000, if married status
• D)$51,500, if single status
• E)$3,000, if married or single status

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Definitions:

Southwest

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