C is corrent. The requirement is to determine when gain or loss on a year-end sale of stock arises for a cash-basis taxpayer. If stock or securities that are traded on an established market are sold, any resulting gain or loss is recognized on the trade date (i.e., the date on which the trade is executed) by both cash- and accrual-method taxpayers.
A is incorrect. The gain or loss arises on the trade date.
B is incorrect. The gain or loss arises on the trade date.
D is incorrect. The gain or loss arises on the trade date.
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