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Topic
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NINJA Question –
In the current year, Fitz, a single taxpayer, sustained a $48,000 loss on Section 1244 stock in JJJ Corp., a qualifying small business corporation, and a $20,000 loss on Section 1244 stock in MMM Corp., another qualifying small business corporation. What is the maximum amount of loss that Fitz can deduct for the current year?
A.
$50,000 capital loss
B.
$68,000 capital loss
C.
$18,000 ordinary loss and $50,000 capital loss
Correct D.
$50,000 ordinary loss and $18,000 capital loss
So the correct answer is D, I get the 50k of ordinary loss but what about the 3K limit on capital losses for individuals. A bit confused. Can someone explain why the entire 18k of capital loss is not subject to the 3k limit?
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