Part Three -   Gains and Losses

The four chapters in this part discuss investment gains and losses,
including how to figure your basis in property. A gain from selling or
trading stocks, bonds, or other investment property may be taxed or it may
be tax free, at least in part. A loss may or may not be deductible. These
chapters also discuss gains from selling property you personally use —
including the special rules for selling your home. Nonbusiness casualty and
theft losses are discussed in chapter 25 in Part Five.

Table of Contents

    * 13.   Basis of Property
          o Introduction
          o Useful Items - You may want to see:
          o Cost Basis
                + Real Property
          o Adjusted Basis
                + Increases to Basis
                + Decreases to Basis
          o Basis Other Than Cost
                + Property Received for Services
                + Taxable Exchanges
                + Involuntary Conversions
                + Nontaxable Exchanges
                + Property Transferred From a Spouse
                + Property Received as a Gift
                + Inherited Property
                + Property Changed to Business or Rental Use
                + Stocks and Bonds
    * 14.   Sale of Property
          o Reminder
          o Introduction
          o Useful Items - You may want to see:
          o Sales and Trades
                + What Is a Sale or Trade?
                + How To Figure Gain or Loss
                + Nontaxable Trades
                + Transfers Between Spouses
                + Related Party Transactions
          o Capital Gains and Losses
                + Capital or Ordinary Gain or Loss
                + Capital Assets and Noncapital Assets
                + Holding Period
                + Nonbusiness Bad Debts
                + Wash Sales
                + Rollover of Gain From Publicly Traded Securities
    * 15.   Selling Your Home
          o What's New
          o Reminders
          o Introduction
          o Useful Items - You may want to see:
          o Main Home
          o Figuring Gain or Loss
                + Selling Price
                + Amount Realized
                + Adjusted Basis
                + Amount of Gain or Loss
                + Other Dispositions
                + Determining Basis
          o Excluding the Gain
                + Maximum Exclusion
                + Ownership and Use Tests
                + Reduced Maximum Exclusion
                + More Than One Home Sold During 2-Year Period
          o Business Use or Rental of Home
          o Reporting the Sale
                +
          o Special Situations
                + Exception for sales to related persons.
          o Recapturing (Paying Back) a Federal Mortgage Subsidy
    * 16.   Reporting Gains and Losses
          o Introduction
          o Useful Items - You may want to see:
          o Reporting Capital Gains and Losses
                + File Form 1099-B or Form 1099-S with the IRS.
                + Capital gain distributions only.
                + Capital Losses
                + Capital Gain Tax Rates
          o Comprehensive Example
                + Capital loss carryover from 2004.
                + Tax computation.