10. Wallace and Pederaen have equal interest in the capital and profits of the p

Question

10. Wallace and Pederaen have equal interest in the capital and profits of the partnership of Wallace and Pedersen, but are otherwise unrelated. On August 1, 2016, Wallace sold 100 shares of Kalmia Mining Corporation to the partnership for its fair market value of $7000. Wallace had bought the stock in 2007 at a cost of $10,000. What is Wallace's deductible loss for 2016 as a result of the sale of the stock? A. $0 B. $3000 long-term capital loss C. $3000 ordinary loss D. $1500 long-term capital loss E. None of these choices are correct 10. Wallace and Pederaen have equal interest in the capital and profits of the partnership of Wallace and Pedersen, but are otherwise unrelated. On August 1, 2016, Wallace sold 100 shares of Kalmia Mining Corporation to the partnership for its fair market value of $7000. Wallace had bought the stock in 2007 at a cost of $10,000. What is Wallace's deductible loss for 2016 as a result of the sale of the stock? A. $0 B. $3000 long-term capital loss C. $3000 ordinary loss D. $1500 long-term capital loss E. None of these choices are correct A. $0 B. $3000 long-term capital loss C. $3000 ordinary loss D. $1500 long-term capital loss E. None of these choices are correct

Explanation / Answer

Wallace's deductible loss for 2016 as a result of the sale of the stock is B. $3000 long-term capital loss.

= $10,000-$7,000

=$3,000

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