Betty incurs the following transactions during the current year. Without conside
ID: 2459074 • Letter: B
Question
Betty incurs the following transactions during the current year. Without considering the
transactions, her 2012 AGI is $40,000. Analyze the transactions and answer the following
questions:
• On March 10, 2012, she sells a painting for $2,000. Betty is the artist, and she completed
the painting in 2007. Her basis for the painting is $50.
• On June 18, 2012, she receives $28,500 from the sale of stock purchased by her uncle
in 2000 for $10,000, which she inherited on February 20, 2012, as a result of her
uncle’s death. The stock’s FMV on that date is $30,000.
•On July 30, 2012, she sells land for $25,000 that was received as a gift from her
brother on April 8, 2012, when the land’s FMV was $30,000. Her brother purchased
the land for $43,000 on October 12, 2004. No gift tax was paid.
a. What is her NSTCL or NSTCG?
b. What is her NLTCL or NLTCG?
c. What is the effect of capital gains and losses on her AGI?
d. What is her capital loss carryforward to the next year?
Explanation / Answer
Answers are:
a.NSTCG- $1,950
b.NLTCL- $1,500
c.No effect on her AGI
d.Her capital loss = $23,000
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