Reposting for mightyjet from Q1 thread that I closed:
Individual Lark's Year 2 brokerage account statement listed the following capital gains and losses from the sale of stock investments:
Short-term capital gain
$ 6,000
Long-term capital gain
14,000
Short-term capital loss
4,000
Long-term capital loss
8,000
In addition, two stock investments became worthless in Year 2. Public Company X stock was purchased in December, Year 1, for $5,000, and formal notification was received by Lark on July, Year 2, that it was worthless. Private company Section 1244 stock was issued to Lark for $10,000 in January, Year 1, and was determined to be worthless in December, Year 2. What is Lark's Year 2 net capital gain or loss before any capital loss limitation?
a.
$2,000 net capital loss.
b.
$7,000 net capital loss.
c.
$8,000 net capital gain.
d.
$3,000 net capital gain.
why is the 5k worthless stock included but not the 10k?
.