Kirk Kelley, a single taxpayer, was engaged in the following transactions in 2018:

∎ Kirk lent a friend \(\$ 2,500\); that person did not pay the loan when it was due and then declared bankruptcy. The loan was deemed totally uncollectible.

∎ Kirk was notified on July 20, 2018 by his stock broker that some corporate bonds he owned have become worthless. He had purchased the bonds for \(\$ 12,000\) on August 22, 2017.

∎ Kirk had a \(\$ 40,000\) loss on the disposition of Sec. 1244 stock purchased several years ago.

a. What are the nature and amount of the losses on Kirk's transactions?

b. What is his AGI for 2018 assuming gross income before the transactions was \(\$ 700,000\) ?