On July 20,2013,Matt (Who Files a Joint Return)purchased 3,000 Shares

question 50

Multiple Choice

On July 20,2013,Matt (who files a joint return) purchased 3,000 shares of Orange Corporation stock (the stock is § 1244 small business stock) for $24,000.On November 10,2013,Matt purchased an additional 1,000 shares of Orange Corporation stock from a friend for $150,000.On September 15,2014,Matt sold the 4,000 shares of stock for $120,000.How should Matt treat the sale of the stock on his 2014 return?

• A)$54,000 ordinary loss.
• B)$100,000 ordinary loss;$46,000 net capital gain.
• C)$100,000 ordinary loss;$20,000 STCL.
• D)$130,000 ordinary loss;$66,000 LTCG.
• E)None of these.

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Definitions:

Premiums

The amount paid for insurance coverage or the payment above the nominal value of a security when issued.

Inland Marine Insurance

An insurance contract that covers goods that are moved by land carriers such as rail, truck, and airplane.

Land Carriers

Companies or entities that transport goods or people over land, such as by road or rail.

Goods

All things (other than money, stocks, and bonds) that are movable.