Ordinary loss allowed on abandoned securities.

• Author: Josephs, Stuart R.
• Position: FED TAX NEWS

IRC Sec. 1234A relevantly states that gain or loss attributable to the cancellation, lapse, expiration or other termination of a right or obligation with respect to property which is a capital asset in the taxpayer's hands shall be treated as gain or loss from a capital asset sale.

In a division opinion, the Tax Court held that abandonment of securities valued at S98.6 million was a capital loss under Sec. 1234A and was not an ordinary loss under Sec. 165(a) (Pilgrim's Pride Corp., 141 TC No...