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Question 1. Question :
(TCO 6) James is a dealer in securities. He would like to acquire and hold stock as a capital asset, then sell it to get a capital gain or loss. Which of the statements below is correct?
Because he is a dealer, he cannot hold stock as a capital asset.
Because he is a dealer, all the stock he acquires is a capital asset.
Losses are capital losses if, at any time, the stock has been clearly identified by James as held for investment.
If James clearly identifies the stock as held for investment by the close of business on the acquisition date, then gain from the stock’s sale will be capital gain.