Al, who is single, has a gain of $40,000 on the sale of § 1244 stock (small business stock) and a loss of $80,000 on the sale of § 1244 stock. As a result, Al has a $40,000 ordinary loss. True False

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Business

Meza

19 February, 14:28

Al, who is single, has a gain of $40,000 on the sale of § 1244 stock (small business stock) and a loss of $80,000 on the sale of § 1244 stock. As a result, Al has a $40,000 ordinary loss. True False

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Answers (1)

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Marcellus · Answer 1

False

Explanation:

Given that

Gain on the sale = $40,000

And loss on the sale = $40,000

So by considering the above information,

So, the gain on sale i. e $40,000 would be classified as a capital gain and the $80,000 would be classified as a ordinary loss which is to limited of $50,000

So, the remaining balance i. e

= $50,000 - $40,000

= $10,000

This $10,000 would be term as capital gain

Hence, the given statement is false