Answer:
$3500 he can take off his income as a capital loss this year.
Step-by-step explanation:
Capital loss:
1. It is the loss realized when any investment's value gets decreased.
2. quantitatively it is the difference of price at which the invest is bought and price at which the investment is sold.
3. The condition for capital loss is that , selling price of investment should be less that buying price of same investment.
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Given
No. of shares bought = 500
cost of 1 share = $10
cost of 500 share = 500 *$10 = $5000
Thus, buying price of invest = $5000
Now price of share drops to $3 per share
thus total price of share now = 500*$3 = $1500
Thus, he sold his investment at $1500
capital loss incurred by him = $5000 - $1500 = $3500 (Answer)
