Question

Courtney invested in RAD, Inc. stock nine months ago. She is considering tax planning strategies at the end of the year and is pondering whether or not to sell her investment in the stock. A friend has advised Courtney that she should hold the stock for at least three more months in order to have a long-term holding period. Which of the following considerations describes a valid reason for selling the stock now?

A. Courtney wants to sell the stock, donate the proceeds to a qualified charity, and utilize the tax deduction on this year's tax return.
B. Courtney currently has $2,000 in capital losses and she needs to generate at least $2,000 in capital gains to be able to deduct her capital losses.
C. Courtney is concerned that the value of the stock will decline in the near future.
D. Courtney is currently in the 37% tax bracket. Consequently, she will not receive preferential treatment for long-term capital gains.

Answer 1

Answer: The correct answer is C.

Courtney is concerned that the value of the stock will decline in the near furure.

Step-by-step explanation:

When investing capital assets, taxpayers run the risk that some of ther investments may decline in value.