Which of the Following Losses Are Generally Deductible

question 121

Multiple Choice

Which of the following losses are generally deductible?
I.Loss on the sale of corporate stock.
II.Losses incurred in carrying on a trade or business.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Long-Term Losses

Financial losses on investments held for more than a year before being sold at a lower price than the purchase cost.

Donor's Adjusted Basis

The original value of an asset for tax purposes, adjusted for factors such as depreciation or improvements, used to determine gain or loss on a gift's transfer.

Donee

The recipient of a gift or donation, often referenced in the context of tax deductions for charitable contributions.

Amount Realized

The total sum received from a sale or transaction after accounting for all expenses and liabilities.