A Worthless Security Had a Holding Period of 6 Months

question 96

Multiple Choice

A worthless security had a holding period of 6 months when it became worthless on December 10, 2018. The investor who had owned the security had a basis of $20,000 for it. Which of the following statements is correct?

• A) The investor has a long-term capital loss of $20,000.
• B) The investor has a short-term capital loss of $20,000.
• C) The investor has a nondeductible loss of $20,000.
• D) The investor has a short-term capital gain of $20,000.
• E) None of the above.

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Definitions:

Vocal Folds

Also known as vocal cords, these are mucous membrane folds in the larynx that vibrate to produce sound for speech and singing.

Vestibular Folds

Folds of mucous membrane situated above the vocal cords in the larynx, also known as false vocal cords.

Larynx

The voice box, located in the throat, which contains the vocal cords and is involved in breathing, producing sound, and protecting the trachea.

Glottis

The part of the larynx consisting of the vocal cords and the slit-like opening between them, involved in producing vocal sounds.