Question
Individual Lark's year 2 brokerage account statement listed the following capital gains and losses from the sale of stock investments: Shortterm capital gain $ 6,000
Individual Lark's year 2 brokerage account statement listed the following capital gains and losses from the sale of stock investments:
Shortterm capital gain $ 6,000
Longterm capital gain 14,000
Shortterm capital loss 4,000
Longterm capital loss 8,000
In addition, two stock investments became worthless in year 2. Public Company X stock was purchased in December, year 1, for $5,000, and formal notification was received by Lark on July, year 2, that it was worthless. Private company Section 1244 stock was issued to Lark for $10,000 in January, year 1, and was determined to be worthless in December, year 2. What is Lark's year 2 net capital gain or loss before any capital loss limitation?
Group of answer choices:
$3,000 short-term capital gain
$2,000 short-term capital gain and $1,000 long-term capital gain
$7,000 net capital loss
$2,000 short-term capital gain and $6,000 long-term capital gain
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