Question

Richard sold some of his stock portfolio to pay for art classes for Donald. He sold 3,200 shares of SpaceCo stock for $60 a share on June 16, 2017. He purchased the stock on June 12, 2002, for $45 a share. There was a commission charge of $175 on the sale of these shares. He also sold 5,500 shares of GameCo stock for $17 a share on February 5, 2017. He purchased the stock for $32 a share on December 2, 2016. Both of these sales were not reported to her on a 1099-B.

TAX RETURN 2017---

where can he report the amounts?

any deductions?

Answer 1

on SpaceCo stock, Richard has long term capital gain of $47825 ((3200*(60-45))-175) (as these stocks were held more than a year)

On GameCo stock, Richard has short term capital loss of $82500 (5500*(32-17))

Each of stock sale should be reported on 1099-B form

capital gain on sale of SpaceCo stock then will be reported on IRS form 8949

and net amount of capital loss $ 34675 (47825-82500) will be repored on Schedule D of form 1040

Here Richard has capital loss of $82500, but he will be allowed to deduct up to $3000 from the ordinary income and excess will allowed to carry forward in future years.