Jackson, a single individual, inherited bean corp. common stock from jackson’s parents. bean is a qualified small business corporation under code section 1244. the stock cost jackson’s parents $20,000 and had a fair market value of $25,000 at the parents’ date of death. during the year, bean declared bankruptcy and jackson was informed that the stock was worthless. what amount may jackson deduct as an ordinary loss in the current year?

Jackson can only deduct $0.

Explanation:

The treatment of this question falls under Section 1244 of the IRS and its treatment for Tax.

According to Section 1244 Stock, there are conditions before a stock loss can be deducted as an ordinary loss.

Two of the requirements are as follows:

In the case of Jackson, the stock was inherited from his parents and not purchased directly from Bean Corp disqualifying from the provision of the section.

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mark as

answer; /// the use of a bank credit card to make purchase;