Assume the same facts as in Problem C:2-51 except that Lois gave the Water stock to her daughter, Sue, six months after she received it. The stock had a $120,000 FMV when Lois acquired it and when she made the gift. Sue sold the stock two years later for $28,000. How is the loss treated for tax purposes? 

Data from Problem C:2-51

Lois, who is single, transfers property with an $80,000 basis and a $120,000 FMV to Water Corporation in exchange for all 100 shares of Water stock. The shares qualify as Sec. 1244 stock. Two years later, Lois sells the shares for $28,000.