need help with this question. It concerns 2015 Federal income Tax. Multiple Atte

Question

need help with this question. It concerns 2015 Federal income Tax.

Multiple Attempts Not allowed. This test can only be taken once. Force completion This test can be saved and resumed at any point until time has expired. The timer will continue to run if you leave the test. Moving to another question will save this response. On September 3, 2014. Able purchased stock in Red Corporation (the stock is not small business stock) for dollar 6,000 On December 31, 2014, the stock was worth dollar 8,500. On August 15, 2016. Able was notified that the stock was worthless. How should Able report this item on his 2014 and 2015 tax returns? 2014-dollar 0: 2015-56,000 short-term capital loss. 2014-dollar 0: 2015-dollar 6,000 long-term capital loss. 2014-dollar 2,500 short-term capital loss: 2015-dollar 8,500 short-term capital loss. 2014-dollar 2,500 short-term capital gain. 2015-dollar 8,500 long-term capital loss. Moving to another question will save this response

Explanation / Answer

For the year 2014, the stock is not sold so unrealised loss or gain can not be reported in the tax return. For the year 2015 return form a loss can be reported as the stock is not worth any value and hence entire cost incurred of $ 6000 is lost As the holding period is from Sep 2014 to Dec 2015(the closing date of year) is more than a year, long term loss can be recognised. So option b is correct.

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.