On May 9, 2013, Uncle Maximilian Clark gifted Andy a gun collection. The collection had an adjusted basis to Maximilian of $4,200 and was worth $13,000 on the date of the gift. After Maximilian died in early 2021, Andy donated the collection to the Alamo Foundation. The transfer was made on December 5, 2021. At that time, the collection was appraised at $16,000. The museum added the guns to its extensive collection of firearms.

(D) Capital Gains (Form 8949)

On May 9, 2000, Andy’s father gave him 400 shares of Ragusa Corporation common stock as a birthday gift. The stock cost his father $16,000 ($40 a share) and was worth $20,000 on the date of the gift. In 2012, when the stock was worth $140 per share, Ragusa declared a 2-for-1 stock split. On July 27, 2021, Andy sold 400 shares for $20,000 ($50 a share). Andy kept the remaining 400 shares. Form 1099–B did not report the basis of this property.

On December 21, 2021, the Clarks sold 500 shares of Cormorant Power common stock for $40,000 ($80 a share). They purchased the stock on February 1, 2021, for $50,000 ($100 a share). The Clarks sold the stock to generate a loss to offset some of their capital gains.

The Clarks have a long-term capital loss carryover of $7,000 from 2020.

Note: Add SCHEDULE 3 and Schedule SE - Adjustment to Income: Deductible Part of Self-Employment Taxes