DiLamer Inc. paid $300,000 to purchase 30-year bonds issued by a publicly held foreign corporation. The foreign government recently privatized the corporation and declared that all outstanding corporate debt obligations would not be honored. What is the tax consequence to DiLamer of this bad news?
A. $300,000 Section 1231 loss.
B. $300,000 ordinary abandonment loss.
C. $300,000 capital loss.
D. No loss recognition until DiLamer actually disposes of the bonds.
Answer: C
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