In 2021, Beth Jarow had a $28,000 loss from the sale of a personal residence. She also purchased from an individual inventor for $7,000 (and resold in two months for $18,000) a patent on a rubber bonding process. The patent had not yet been reduced to practice. Beth purchased the patent as an investment. In addition, she had the following capital gains and losses from stock transactions.

What is Beth’s net capital gain or loss? Draft a letter to Beth, explaining the tax treatment of the sale of her personal residence. Assume that Beth’s income from other sources puts her in the 24% bracket. Beth’s address is 1120 West Street, Ashland, OR 97520.

Transcribed Image Text:

Long-term capital loss Long-term capital loss carryover from 2020 Short-term capital gain Short-term capital loss ($ 6,000) (12,000) 21,000 (7,000)