When Pheasant Corporation was formed under § 351, Kristen transferred property (basis of $26,000 and fair market value of $22,500) for § 1244 stock. Kristen’s basis in the Pheasant stock is $26,000. Three years later, Pheasant Corporation goes bankrupt and its stock becomes worthless. Kristen, who is single, owned the stock as an investment. Kristen’s loss is:
a. $26,000 capital.
b. $22,500 ordinary and $3,500 capital.
c. $3,500 ordinary and $22,500 capital.
d. $26,000 ordinary.
e. None of the above.

B $22,500 ordinary and $3,500 capital.

Explanation:

Total loss incurred to Kristen = $26,000

The fair market value = $22,500

Capital loss = Total loss incurred - fair market value

Capital loss = $26,000 - $22,500 = $3,500 Capital loss

So the right answer is Option B $22,500 ordinary and $3,500 capital

answer; /// i do believe that the above is (true)

since the options are not listed, when you are working on your budget you should also add water, tv, internet, miscellaneous and your 'fun' money for in your budget. when budgeting, you need to allow for fun money, and mis/accidental money so that you stick to the budget and not go crazy because you feel strapped to the budget.