In January, Year 2, a single individual taxpayer inherited stock in a qualified small business under Section 1244.  The inherited stock had cost the taxpayer's parents $10,000 and was worth $17,000 on the date of death.  In June, Year 2, the inherited stock was deemed worthless.  In July, Year 2, the taxpayer sold stock in a large corporation for $10,000.  The taxpayer had purchased the stock for $7,000 in December, Year 1.  What amount of loss can the taxpayer deduct against ordinary income in Year 2?

In Year 1, an individual taxpayer purchased a condominium used as rental property at a cost of $180,000.  The taxpayer sold the condominium for $200,000 in Year 3.  The condominium had an adjusted basis of $161,000 and accumulated depreciation of $19,000 using straight-line depreciation under the MACRS.  How should the taxpayer report the gain in Year 3?

Answer rating: 100% (QA)

For the first scenario The taxpayer inherited stock in a qualified small business in January Year 2 ... View the full answer