Final answer:
A loss is allowed for securities that become completely worthless during the year.
Step-by-step explanation:
The statement is true. A loss is allowed for securities that become completely worthless during the year.
When an individual or organization owns securities that become completely worthless, they can claim a loss on their tax return. This loss is known as a capital loss and can be used to offset capital gains or deducted against other income up to a certain limit.
For example, if an individual purchased stocks for $5,000 but the stocks become totally worthless, they can claim a $5,000 capital loss on their tax return.