# The sale of the scooter results in a realized loss of

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The sale of the scooter results in a realized loss of \$150 (\$700 − \$550). The painting results in a realized gain of \$ 300 (\$1,200 − \$900). However, Rebecca only recognizes the gain on the painting (the scooter is a personal use asset, and the related loss is not allowed). Solution loss gain painting
14. DRILL.computing.NCG.or.NCL Tax Drill - Property Transactions Rebecca sells her personal scooter for \$550. She purchased the scooter for \$700 three years ago. She also sells a painting for \$1,200 which she acquired five years ago for \$900. Rebecca has a \$ 150 realized loss on the scooter and a \$ 300 realized gain on the painting. Rebecca only will recognize the gain or loss associated with the painting Tax Drill - Computing NCG or NCL During the year, Tamara had capital transactions resulting in gains (losses) as follows: Sold stock in ABC Company (acquired two years ago) (\$1,500) Sold collectible coins (held for more than one year) \$2,000 Sold stock in XYZ Company (acquired six months ago) (\$4,100) Sold stock in LMN Company (acquired three years ago) \$500 a. As a result of these transactions, Tamara has an overall net of \$ 3,100 . b. Is the amount of her overall net gain or loss limited this year? c. If "Yes", what is the limit. If "No", enter "0". \$ 3,000 Feedback Check My Work To obtain a good perspective on how the Federal income tax functions, some overview of property transactions is needed. This is particularly the case with capital gains and losses, which can generate unique tax consequences. Post-Submission Answers: short-term capital loss; \$3,100; Yes; \$3,000. Capital assets are defined in the Code as any property held by the taxpayer other than property listed in § 1221. The list in § 1221 includes inventory, accounts receivable, and depreciable property or real estate used in a business. Thus, the sale or exchange of assets in these categories usually results in ordinary income or loss treatment. The principal capital assets held by an individual taxpayer include assets held for personal (rather than business) use, such as a personal residence or an automobile, and assets held for investment purposes (e.g., corporate securities and land). Capital assets generally include collectibles, which are subject to somewhat unique tax treatment. Collectibles include art, antiques, gems, metals, stamps, some coins and bullion, and alcoholic beverages that are held as investments. To arrive at a net capital gain, capital losses must be taken into account. The capital losses are aggregated by holding period (short-term and long-term) and applied against the gains in that category. If excess losses result, they are then shifted to the category carrying the highest tax rate. A net capital gain will occur if the net long-term capital gain (NLTCG) exceeds the net short-term capital loss (NSTCL). For individual taxpayers, net capital loss can be used to offset ordinary income of up to \$3,000 (\$1,500 for married persons filing separate returns). If a taxpayer has both short- and long-term capital losses, the short-term category is used first to arrive at the \$3,000. Any