Amelia purchased 400 shares of BBC common stock several year

Amelia purchased 400 shares of BBC common stock several years ago for $1,600. On June 30, Amelia sold the shares of BBC common for $600 and then purchased 225 shares of BBC preferred stock two days later for $800. The BBC preferred stock is not convertible into BBC common stock. What is Amelia’s deductible loss from the sale of the 400 shares of BBC common stock?

Solution

The Amelia\'s deduction for loss on common stock $1000. It is a Long term Loss and should be first adjusted towards Long term Gain and if any avaialable will be applied towards Short Term gain