The fifth course in this series discusses which gains and losses are recognized and which are not. It defines basic terms, such as amount realized, basis, realized gain, and realized loss.' It then moves on to examining specific situations. It explains the basic requirements for the exclusion of gain on the sale of a principal residence; nonrecognition of gain on involuntary conversions; computation of the basis of property, either that which was sold or exchanged, or property acquired by gift or in some other way. Finally, the course looks at the distinction between capital and ordinary assets, which is important because capital gains and losses are reported differently from ordinary gains and losses, and the deduction of capital losses is sharply limited.
Score:95.00