Betty incurs the following transactions during the current year. Without considering the transactions, her 2014 AGI is $40,000. Analyze the transactions and answer the following questions: On March 10,2014 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 18,2014 she receives $28,500 from the sale of stock purchased by her uncle in 2000 for $10,000, which she inherited on February 20,2014, as a result of her uncle's death. The stock's FMV on that date is $30,000. On July 30,2014 she sells land for $25,000 that was received as a gift from her brother on April 9,2014, when the land's FMV was $30,000. Her brother purchased the land for $43,000 on October 12, 2006. No gift tax was paid.
a. What is her NSTCL or NSTCG? Includes stock from Uncle and property gift from brother. Would I include gift tax because it is more tha $13000, and her brother didn't pay it? NCL from stock is (1,500)..because you take FMV-what she received. NCL on property is (5,000). Therefore the total NSTCL is: $6,500.
b. What is her NLTCL or NLTCG? Only includes the sale of the painting. Sold for 2,000-50 (for painting basis)=$1,950=NLTCG
c. What is the effect of capital gains and losses on her AGI? $6,500-$1,950=$4,550 net capital loss.
d. What is her capital loss carry forward to the next year? $3,500...because you get a max limit of $3000/yr.