Mark and Lucy owned two stocks, Tinker Inc., and Chance Inc., that became worthless during year 8. The adjusted basis

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Mark and Lucy owned two stocks, Tinker Inc., and Chance Inc., that became worthless during year 8. The adjusted basis in Tinker was $80,000. Tinker was incorporated in year 2, and Mark and Lucy purchased their stock in year 4. Their adjusted basis in Chance was $20,000. Chance was incorporated in year 2, and Mark and Lucy were original stockholders. Both stocks were purchased for cash, and each corporation had total capital of $500,000. How much ordinary loss can Mark and Lucy deduct on their joint year 8 tax return as a result of these transactions?

a. $0

b. $20,000

c. $80,000

d. $100,000

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Related Book For  answer-question

South Western Federal Taxation 2023 Comprehensive Volume

ISBN: 9780357719688

46th Edition

Authors: Annette Nellen, Andrew D. Cuccia, Mark Persellin, James C. Young

Question Details
Chapter # 7- Deductions and Losses: Certain Business Expenses and Losses
Section: Review Questions
Problem: 2
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Question Posted: September 24, 2023 07:11:25