Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Income — Capital Gain or Loss Workout

Out of Scope

Out of Scope Situations for VITA/TCE

The following are out of scope for this lesson. While this list may not be all inclusive, it is provided for your awareness only.

  • Taxpayers who have sold any assets other than stock, mutual funds, or a personal residence
  • Determination of basis issues:
    • Basis of stock acquired other than by purchase or inheritance, such as a gift or employee stock option plan
    • Basis of inherited property determined by method other than the fair market value (FMV) of the property on the date of the decedent's death
    • Basis of property acquired from a decedent who died in 2010
    • Basis of property received as a gift
  • Like-kind exchanges and worthless securities
  • Form 1099-B, boxes on Bartering: Profit or (loss) realized on closed contracts; Unrealized profit or (loss) on open contracts – prior year; Unrealized profit or (loss) on open contracts – current year; or Aggregate profit (loss) on contracts
  • Reduced exclusion computations/determinations in the sale of a home
  • Married homeowners who do not meet all requirements to claim the maximum exclusion on sale of home
  • Decreases to basis, including:
    • Deductible casualty losses and gains a taxpayer postponed from the sale of a previous home before May 7, 1997
    • Depreciation during the time the home was used for business purposes or as rental property
  • Taxpayers with "nonqualified use" issues
  • Sale of a home used for business purposes or as rental property
  • Form 4797 - Other gains or (losses)