Reference no: EM132678938

1. All of the following statements concerning deducting loss from the sale of certain small business stock (1244 stock) are correct EXCEPT:

A. losses on 1244 stock may be deducted against ordinary income

B. there is no limit on the amount of the loss that may be claimed in any one year

C. the loss may be triggered by a sale or exchange of the 1244 stock or by the worthlessness of the stock

D. the ordinary loss may only be claimed by an individual to whom the stock was originally issued

2. Amy sold 600 shares of RAMANZEE, Inc. at a loss of $12,500 on June 15, 2018. On July 12, 2018 she purchased another 850 shares of RAMANZEE for $16,700. In Amy's situation:

a) How much of the losses from selling 600 shares of RAMANZEE, Inc. must she recognize in 2018?

b) What is her basis in the 850 shares of RAMANZEE purchased on July 12, 2018?