Taxpayer invests $50,000 in domestic stocks during 2022, and keeps them.

At the end of 2022 the FMV of these stock is $43,000.

Which of the following be true?
  1. GAAP requires a loss of $7000 be recorded.
  2. Tax basis of the investment is still $50,000.
  3. A book-to-tax difference is created in 2022.
  4. The book-to-tax difference is not reported in 2022 but when stocks are sold.
  5. Taxable income recognizes the $7000 loss, and no book-to-tax difference exists.