Wallace and Pedersen Have Equal Interests in the Capital and Profits

question 56

Multiple Choice

Wallace and Pedersen have equal interests in the capital and profits of the partnership of Wallace and Pedersen. They are otherwise unrelated to each other. On August 1, 2019, Wallace sold 100 shares of Kalmia Mining Corporation to the partnership for its fair market value of $7,000. Wallace had bought the stock in 2010 at a cost of $10,000. What is Wallace's deductible loss for 2019 as a result of the sale of this stock?

• A)$0
• B)$1,500 long-term capital loss
• C)$3,000 long-term capital loss
• D)$3,000 ordinary loss
• E)None of these

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Definitions:

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The act of making new or important information known, especially regarding the financial state or performance of a company.

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