John owns some stock which he has held for many years now. He loves the investment as it pays a nice quarterly dividend, without fail. However, he has run into some financial issues. As a result, he decides to sell the stock to his brother, to keep the investment in the family. Although the stock has paid steady dividends, the stock market has not viewed the business favorably, so John has experienced a declining stock value. On the sale of the stock to his brother, can he deduct the loss? If the stock does appreciate in the future under his brother's ownership, how is the gain going to be computed when his brother sells the stock?