Calculdu Problem 4-2 (Algorithmic) What is a Capital Asset?, Holding Period, Calculation of Gain or Loss, and Net Capital Gains (LO 4.1, 4.2, 4.3, 4.5) During 2019, Tom sold Sears stock for $25,000. The stock was purchased 4 years ago for $35,000. Tom also sold Ford Motor Company bonds for $87,500. The bonds were purchased 2 months ago for $74,375. Home Depot stock, purchased 2 years ago for $2,500, was sold by Tom for $3,750. Calculate Tom's net gain or loss, and indicate the nature of the gain or loss. $ 5,000 X Net short-term capital gain Feedback Check My Work When taxpayers dispose of property, they must calculate any gain or loss on the transaction and report the gain or loss on their tax returns How gains and losses are reported is dependent on the nature of the property and the length of time the property has been owned A taxpayer must calculate his or her amount realized and the adjusted basis of property sold or exchanged to arrive at the amount of the g or loss realized on the disposition. If a taxpayer has multiple gains and loss during the year, a netting process is followed to determine the overall net capital gain or loss