In 2022, Beth Jarow had a $28,000 loss from the sale of a personal residence. She also purchased a patent on a rubber bonding process from an individual inventor for $7,000 (and resold it in two months for $18,000). The patent had not yet been reduced to practice. Beth purchased the patent as an investment.

In addition, she had the following capital gains and losses from stock transactions:

What is Beth’s net capital gain or loss? Draft a letter to Beth explaining the tax treatment of the sale of her personal residence. Assume that Beth’s income from other sources puts her in the 24% bracket. Beth’s address is 1120 West Street, Ashland, OR 97520.

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Long-term capital loss Long-term capital loss carryover from 2021 Short-term capital gain Short-term capital loss ($ 6,000) (12,000) 21,000 (7,000)