13.) On September 3, XX01, Able purchased stock in Red Corporation (the stock is not small business stock) for $6,000. On December 31, XX01, the stock was worth $5,500. On August 15, XX02, Able was notified that the stock was worthless. How should Able report this item on his XX01 and XX02 tax returns?

A.) XX01-$2,500 short-term capital loss; XX02-$8,500 short-term capital loss.

B.) XX01-$2,500 short-term capital gain; XX02-$3,800 long-term capital loss.

C.) XX01-$0; XX02-$6,000 long-term capital loss.

D.) None of the choices is correct.

E.) XX01-$0; XX02-$6,000 short-term capital loss.