On June 1, 2018, Brady Purchased an Option to Buy

question 85

Multiple Choice

On June 1, 2018, Brady purchased an option to buy 1,000 shares of General, Inc. at $40 per share. He purchased the option for $3,000. It was to remain in effect for five months. The market experienced a decline during the latter part of the year, so Brady decided to let the option lapse as of December 1, 2018. On his 2018 tax return, what should Brady report?

• A) A $3,000 long-term capital loss.
• B) A $3,000 short-term capital loss.
• C) A $3,000 § 1231 loss.
• D) A $3,000 ordinary loss.
• E) None of the above.

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Definitions:

Gender Neutrality

The concept of designing and providing services or facilities that do not discriminate based on gender.

Product Design

The process of creating and developing new products by defining their features, specifications, and aesthetics to meet customer needs and preferences.

Value Consciousness

The concern for obtaining the best quality, features, and performance of a product or service for a given price that drives consumption behavior.

Consumption Behavior

The study of how individuals select, buy, use, and dispose of goods and services.