Duane Uba Sold the Shares of an Arm's-Length Small Business

question 7

Multiple Choice

Duane Uba sold the shares of an arm's-length small business corporation in 2020, resulting in a capital loss of $2,000.If all of the conditions for an allowable business loss are met, Duane will recognize which of the following?

• A)ITA 3(d) deduction of $1,000 in 2020.
• B)ITA 3(b) deduction of $2,000 in 2020.
• C)ITA 3(b) gain of $1,000 in 2020.
• D)ITA 3(d) loss of $2,000 in 2020.

---

Definitions:

Merit Scholarships

Financial awards for students based on their academic achievements, talents, or other abilities, rather than financial need.

Financial Need

The difference between the cost of attending a school and the family's ability to pay, often considered for determining financial aid eligibility.

Scholarship

Financial support awarded to a student based on academic achievement or other criteria to help pay for education expenses.

Financial Aid

Assistance given to students to help pay for their education, which may include grants, scholarships, loans, and work-study opportunities.