Nikki Exchanges Property Having a $20,000 Adjusted Basis and a $16,000

question 16

Essay

Nikki exchanges property having a $20,000 adjusted basis and a $16,000 FMV for 100 shares of Niftik stock in a transaction qualifying under Sec. 351. The stock qualifies as Sec. 1244 stock. Nikki's basis in her Niftik stock is $20,000. If Nikki sells her stock for $5,000, what is the amount and character of her loss?

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Definitions:

FTC Act Section

Specific provisions within the Federal Trade Commission Act, which regulates business practices and protects consumers.

Lanham Act

The primary federal trademark statute in the United States, providing protection against trademark infringement and unfair competition.

Truth In Lending Act

A national statute aimed at encouraging the knowledgeable utilization of consumer credit through mandating the revelation of its conditions and expenses.

Unsecured Open-End Credit

A line of credit that does not require collateral and can be used repeatedly up to a certain limit.