Richard and Cindy Grand own a corporate business that they started in 1998, in which their basis is $180,000. The stock became worthless during the current year. They have no other capital gains and losses for the year. How much may they deduct and what is the character of their loss?

1 $50,000 ordinary loss; $3,000 capital loss; $127,000 long-term capital loss carryover

2 $100,000 ordinary loss; $3,000 capital loss; $77,000 long-term capital loss carryover

3 $180,000 ordinary loss

4 $ indeterminable from facts presented