Form 1041 & K-1

[Just wondering]

Gross Income define.

So gross income for capital assets would be the "Gain" derived from dealings in property, not the actual sales amount

If I have a 1099B with the amount of $35,000, would that be gross income if I figure my net profit or loss and come up with a loss. say of $2,000.00.
This would not fall under number ((3) Gains derived from dealings in property) since I have a loss not a gain.---Any thoughts on this?

[S T]

More from another source

Interesting question:
Found this from a tax law seminar:

GAIN FROM DEALINGS IN PROPERTY

Return-of-capital concept: if T lends B money and later pays it back no one would suppose that T has gross income upon the mere repayment of the principal amount of the loan. This is because the repayment constitutes a mere return of capital

Basis: generally the cost of something or if gained by other than purchase then its market value

Gain on the disposition of property §1001(a): the excess of the “amount realized” over the “adjusted basis”

Amount realized: the amount of money received and the fair market value of the property (other than money) received on the disposition

§1001 Formula: The amount realized (what you sell it for)

- adjusted basis

= the taxable gain or loss

So the reference to gain appears to be "realized". If there is a loss, then it would appear that you would not have "gross income" and maybe a filing requirement would not be needed. However, most of us might believe that the transaction should be reported, due to the computer matching on the information returns such as 1099S and 1099B forms. Remember that the government only sees the sale transaction and does not have the "crystal ball" for what the gain or loss is.

Sandy

[abby]

establish carryforward

Very good. Thanks again.

Another reason to file with a loss is to establish the possible carryforward of a loss into a profitable year. If the loss is substantial, you could have the amount over the $3000 allowed each year to offset future gains.