Aunt Bea sold some stock she purchased several years ago for $10,000 to her nephew, Andy, for $6,000.
I.If this is Aunt Bea's only stock transaction, she can deduct only $3,000 of the loss.
II.If Andy sells the stock for $10,000, his taxable gain is $4,000.

Question

Aunt Bea sold some stock she purchased several years ago for $10,000 to her nephew, Andy, for $6,000.
I.If this is Aunt Bea's only stock transaction, she can deduct only $3,000 of the loss.
II.If Andy sells the stock for $10,000, his taxable gain is $4,000.
​

Quizplus · Accepted Answer

Aunt Bea can only deduct $3,000 of the loss per year due to the capital loss deduction limit. Andy's taxable gain is $4,000 because his basis in the stock is $6,000, the price he paid.

Aunt Bea Sold Some Stock She Purchased Several Years Ago