In December 2019, Zeb incurred a $100,000 loss on the sale of Pike Corporation stock that he purchased in 2010. The stock satisfied all of the §1244 stock requirements at the time of issue. In addition, Zeb reported a long-term capital gain of $40,000 in 2019. Zeb is single. How much of the loss can Zeb deduct in 2019, and what is the character of the loss?
What will be an ideal response?
$50,000 ordinary loss under §1244, $40,000 capital loss deduction that is utilized against the capital gain of $40,000, and a $3,000 capital loss against ordinary income as part of the remaining net capital loss of $10,000. Zeb has a residual net capital loss carryforward to 2020 of $7,000.
§1244 limits the ordinary loss deduction for a single individual to $50,000. Any remaining NCL can offset capital gains, with the remainder reducing up to $3,000 of ordinary income.
You might also like to view...
Generally, the time frame required for new task purchase is very short
Indicate whether the statement is true or false
What tool is used to identify expectations of clients?
A. portfolio analysis B. stakeholder analysis C. client value planning D. organizational strategy
Chronemics is the intentional or unintentional implied meaning of a message
Indicate whether the statement is true or false.
Lenart Corporation has provided the following data for its two most recent years of operation: Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials$13Direct labor$6Variable manufacturing overhead$4Fixed manufacturing overhead per year$70,000Selling and administrative expenses: Variable selling and administrative expense per unit sold$6Fixed selling and administrative expense per year$83,000 Year 1Year 2Units in beginning inventory01,000Units produced during the year10,0007,000Units sold during the year9,0006,000Units in ending inventory1,0002,000The unit product cost under absorption costing in Year 2 is closest to:
A. $23.00 B. $10.00 C. $33.00 D. $39.00