Mrs Tinker Paid $78,400 to Purchase 15,000 Shares of HiFli

Multiple Choice

Mrs. Tinker paid $78,400 to purchase 15,000 shares of HiFli common stock in 2010. This year, HiFli declared bankruptcy and announced that its stock has no value. What is the tax consequence to Mrs. Tinker of this bad news?

A) $78,400 ordinary abandonment loss
B) $78,400 capital loss
C) No loss recognition until Mrs. Tinker actually disposes of the stock
D) None of these choices are correct