Question: Kappes Corp. distributed marketable securities in a pro rata redemption of its stock in a complete liquidation. These securities, which had been purchased in 2004

Kappes Corp. distributed marketable securities in a pro rata redemption of its stock in a complete liquidation. These securities, which had been purchased in 2004 for $150,000, had a fair market value of $100,000 when distributed. What loss does Kappes recognize as a result of the distribution?

a. $0.

b. $50,000 long-term capital loss.

c. $50,000 Section 1231 loss.

d. $50,000 ordinary loss.

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