On July 20, 2017, Matt (Who Files a Joint Return)

question 47

Multiple Choice

On July 20, 2017, 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, 2017, Matt purchased an additional 1,000 shares of Orange Corporation stock from a friend for $150,000. On September 15, 2018, Matt sold the 4,000 shares of stock for $120,000. How should Matt treat the sale of the stock on his 2018 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 the above.

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Definitions:

Place of Delivery

The agreed-upon or designated location where goods are to be delivered or transferred from the seller to the buyer.

Performing Contractual

The process of fulfilling the obligations as outlined in a contract.

Excused Sellers

Sellers who are relieved from the obligation to deliver goods under a contract due to certain conditions that make performance impracticable.

Usage of Trade

A set of practices or behaviors that are widely accepted and used by a particular industry or commercial sector.