In $2016,$ Minjun, who is single, acquired original issue stock in Blue Corporation at a cost of $$63,000.$ This stock meets the definition of both $1202$ and $1244$ stock. This year, Minjun sold the Blue stock.

Determine the amount and nature of Minjun's gain or loss recognized this year in each of the following scenarios:

a$.$ The stock is sold for $$5,200.$

Minjun's sale of Blue Corporation stock produces a total loss of $fill in the blank $1$ of which $fill in the blank $2$ is treated as a capital loss.

b$.$ The stock is sold for $$520,000.$

Minjun's recognized gain $fill in the blank $3$

Feedback

Check My Work

In an exception to the capital treatment that generally results, $\backslash (\backslash$S $1244\backslash )$ permits special loss treatment for losses on the sale or worthlessness of stock of so$-$called small business corporations. By placing shareholders on a more nearly equal basis with proprietors and partners in terms of the tax treatment of losses, the provision encourages investment of capital in small corporations.