1. During the tax year 2013, Chris had the following capital gains and losses.

• $5,000 loss from the sale of shares of Big Box, Inc. that he bought in February 2013 and sold on the last day of the year
• $6,000 loss from the sale of Microstrategy stock that he purchased in December 2008
• a $10,000 unrecaptured Section 1250 gain from the sale of real estate
• a gain of $4,000 from the sale of collectibles that he had owned since 1994

Describe the netting process.