A Worthless Security Had a Holding Period of 6 Months

question 64

Multiple Choice

A worthless security had a holding period of 6 months when it became worthless on December 10,2016.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:

Median

The middle value in a data set, which divides the data into two halves.

Descriptive Statistics

Statistical measures that summarize and describe the features of a collection of information, such as mean, median, and mode.

Summarizing Data

The process of presenting large amounts of data in a compact, easily interpretable form, often using statistical measures.

Collecting Data

The process of gathering and measuring information on variables of interest in an systematic fashion, enabling one to answer stated research questions, test hypotheses, and evaluate outcomes.