Short-term loss on collectible sale

[Fred Pruslin]

Client sold art work at a major auction gallery for a loss (sale price minus basis). Also sold another painting at auction for a gain but less than the loss on the first item. On Schedule D, can the short term loss be offset against the long term gain? Therefore, net capital loss and no tax due. Is this correct? No statement was or will be sent to the seller or IRS by the auction house reporting the gains and losses.

[Bees Knees]

Line 16 on the Schedule D nets short term gains and losses with long term gains and losses. Thus, the answer is yes; short term losses can offset long term gains.