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QUESTION
The gain will be a long-term capital gain.
The gain will be a long-term capital gain. P. C:6-14. C:6-89.Penny, a cash basis taxpayer reported a $15,000 long-term capital gain on the exchange of her Midwest Corporation stock when the corporation liquidated in 2004. Midwest subsequently lost a lawsuit and Penny paid an additional $3,000 in 2008 as her part of the settlement. What are the tax consequences to Penny in 2008 of the $3,000 additional payment she made?
