This year Barney purchased 500 shares of Bell common stock for $20 per share. At year-end the Bell shares were only worth $2 per share. What amount can Barney deduct as a loss this year?

This year Barney purchased 500 shares of Bell common stock for $20 per share. At year-end the Bell shares were only worth $2 per share. What amount can Barney deduct as a loss this year?

This year Barney purchased 500 shares of Bell common stock for $20 per share. At year-end the Bell shares were only worth $2 per share. What amount can Barney deduct as a loss this year?


A. $10,000

B. $9,000

C. $1,000

D. Barney can deduct $10,000 only if he includes $1,000 in his taxable income.

E. None of the choices are correct - Barney is not entitled to a loss deduction.


Answer: E


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