Samuel Reese sold 1,000 shares of his stock in Maroon, Inc., an S corporation. He sold the stock for $15,700 after he had owned it for six years. Samuel had paid $141,250 for the stock, which was issued under 1244. Samuel is married and separately owns the 1,000 shares. Assume Samuel and his wife file a joint tax return.

Complete the statement below that outlines the the appropriate Federal income tax treatment of any gain or loss on the stock sale.

Samuel Reese recognizes a loss of $________, of which $_________ is an ordinary 1244 deduction and $________ is a long-term capital loss.