Ralph and Yolanda Purchased 20% of the Initial Offering of Major

question 99

Multiple Choice

Ralph and Yolanda purchased 20% of the initial offering of Major Corporation common stock for $150,000. Major Corporation is a qualifying small business corporation and the stock qualifies as Sec. 1244 stock. Ten months later, Major Corporation files for bankruptcy and the shareholders are notified that the stock is worthless. Ralph and Yolanda, who are married and file a joint return, have a

• A)$150,000 ordinary loss.
• B)$150,000 capital loss.
• C)$100,000 ordinary loss; $50,000 capital loss.
• D)$100,000 ordinary loss; $50,000 ordinary loss carryforward.

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Definitions:

Casino Jackpot

A large cash prize or payout in a gambling game, typically accumulating until it is won.

Winning

Achieving a position of leadership or superiority in a contest or competition.

Mentally Rehearsing

Mentally rehearsing involves practicing an activity or visualizing a performance in the mind without physical execution, to improve skill or prepare for actual performance.

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The process of letting go of resentment, anger, or claims against another individual or oneself for perceived offenses.