Ted purchased all of the stock of Fontana Manufacturing Corporation in 2017 for

$170,000. Under Ted’s leadership, Fontana Manufacturing soon became unprofitable, and Ted decided to liquidate Fontana as of the close of business on June 30, 2019. All of Fontana’s assets were needed to pay thirdparty creditors, and Ted received nothing for his $170,000 investment.

a. Describe the amount and character of Ted’s loss.

b. How would your answer to

(a) change if Fontana Manufacturing were instead owned by TED Corporation?