Linda invests $200,000 in candycane, inc. its stock qualifites as Section 1244 stock for Linda. Six years after her investment, candycane, inc. declares bankruptcy and ceases all operations. the stock is declared to be totally worthless. Linda files a joint return with her husband. Based solely on the facts as presented:

I. linda may deduct up to $75,000 as an ordinary loss in the year the stock became worthless

II. a long-term offset losses on ordinary income up to $100,000 in the year the stock was declared worthless

III. a long-term capital loss may not be taken against any long-term gains if the basis in stock has not been declared

IV. a $100,000 deduction that offsets ordinary income may be allowed during the year that the stock was declared worthless, and the remaining $100,000 can be characterized as long-term capital loss.

select one:

a. I only

b. II and III

c. II IV

d. III only