Andy reported the following gains and losses from the sale of capital assets

Question

Andy reported the following gains and losses from the sale of capital assets:

• Loss on Pigeon Corporation stock (held 9 months): (15,000)

• Gain on Dove, Inc. stock (held for 2 years): 5,000

• Gain on unimproved land (held for 3 years as investment): 3,000

• How much gain or loss will Andy report on his tax return?

• If the assets were owned by a corporation, would your answer change?

Answer 1

ST gain (loss) LT gain

Pigeon stock (15000)

Dove 5000

land 3000

total reported on schedule D (15000) 8000

Net loss (7000)

Deduction allowed on 1040 (3000)

CArryforward St loss (4000)

corporate yes. Corporations can only offset capital gains against capital losses. THey do not get preferred tax rates as they have a flat 21% on all income. Losses can be carried back three years or carried forward up to five years