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 is the owner of the 1,000 shares.

Note: Assume Samuel and his wife file a joint tax return.

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

Samuel Resee recognizes a loss of $, of which $is an ordinary 1244 deduction and $isSelecta long-term capital lossan ordinary lossa short-term capital lossItem 4.