Question

Samuel reese sold 1,000 shares of his stock in maroon, inc., an s corporation. he sold the stock for $15,700 after he had owned it for six years. samuel had paid $141,250 for the stock, which was issued under § 1244. samuel is married and is the owner of the 1,000 shares. samuel and his wife file a joint tax return. determine the appropriate treatment of any gain or loss on the stock sale.

Answer 1

Complete the statement below that outlines the appropriate Federal income tax treatment of any gain or loss on the stock sale.

Samuel Reese recognizes a loss of $125,550, of which $100,000 is an ordinary § 1244 deduction and $25,550 is a long-term capital loss.