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    Recognized gain or loss of stock investment

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    On August 10, 2003, an investor purchased 1,000 shares of Mauve Corporation for $30,000. On January 2, 2004, the stock became worthless. What is the recognized gain or loss and how is it classified?

    a. $3,000 STCL.

    b. $30,000 STCL.

    c. $3,000 LTCL.

    d. $30,000 LTCL.

    e. None of the above.

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    Solution Preview

    b. $30,000 STCL. (ANSWER)

    A capital gain is the difference between what you paid for an investment and what you received when you sold that investment. If ...

    Solution Summary

    This solution is comprised of a detailed explanation to answer what is the recognized gain or loss and how is it classified.

    $2.19

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