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Samuel Reese sold 1,000 shares of his stock in Maroon, Inc
Samuel Reese sold 1,000 shares of his stock in Maroon, Inc., an S corporation. He sold the stock for $15,700 after he had owned it for six years. Samuel had paid $141,250 for the stock, which was issued under § 1244. Samuel is married and is the owner of the 1,000 shares. Determine the appropriate treatment of any gain or loss on the stock sale.
Expert Solution
Determination of appropriate treatment of any gain or loss on the stock sale:
Samuel paid (Purchase) = $141,250
Less: Samuel sold = $15,700
Recognizes Loss = $125,550
So, Samuel Reese recognizes a loss of $ 125,550.
$100,000 is an ordinary loss of § 1244 deduction can be taken by married as well as jointly filled tax return payers.
Long-term capital loss= $125,550 - $100,000 = $25,550
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