---
title: "Build a gain-and-loss framework from the sale papers"
url: "https://ailawframework.com/practice/taxation/build-a-capital-gains-calculation-framework-from-the-transaction-papers/united-states"
type: "task_jurisdiction_version"
site: "AI Law Framework"
id: "A26-T1-R7-US"
practice_area: "Taxation"
tier: "yellow"
lawyer_review: "required"
jurisdictions: ["US"]
last_reviewed: "2026-10-22"
---

# Build a gain-and-loss framework from the sale papers

> Build a table of each asset, the money and other property the papers show as received, and the basis figure the lawyer supplies.…

Canonical page: https://ailawframework.com/practice/taxation/build-a-capital-gains-calculation-framework-from-the-transaction-papers/united-states  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Taxation](https://ailawframework.com/practice/taxation.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| How AI is used | Build a table of each asset, the money and other property the papers show as received, and the basis figure the lawyer supplies. Flag an asset the papers describe as inventory, as held for sale to customers, or as depreciable or real property used in the business. Do not compute a tax. |
| What the lawyer must review | 26 U.S.C. § 1001: gain on a sale or other disposition is the excess of the amount realized over the adjusted basis provided in section 1011, and loss is the excess of that adjusted basis over the amount realized. The amount realized is any money received plus the fair market value of other property received. You open section 1011 before a basis figure is treated as the adjusted basis, and you read the rest of section 1001(b). 26 U.S.C. § 1221: a capital asset is property held by the taxpayer, whether or not connected with a trade or business, but does not include inventory or property held primarily for sale to customers in the ordinary course, or property used in the trade or business of a character subject to the allowance for depreciation, or real property used in the trade or business. Further exclusions follow in the section. You decide the character of the gain. Do not state a rate or a holding period. |
| Written for | United States |
| Applies to | [Build a capital-gains calculation framework from the transaction papers](https://ailawframework.com/practice/taxation/build-a-capital-gains-calculation-framework-from-the-transaction-papers.md) |

## Checking plan

- What the AI does: Build a table of each asset, the money and other property the papers show as received, and the basis figure the lawyer supplies. Flag an asset the papers describe as inventory, as held for sale to customers, or as depreciable or real property used in the business. Do not compute a tax.
- Basis: Checked against the linked sources on 22 October 2026. Confirm the current instrument before reliance.

## Notes

- Holding period and rate are in other sections. Do not state them from this framework.
- Section 1221 has more exclusions than the two named here. Read the rest before character is decided.

## Sources

- [26 U.S.C. § 1001 (determination of amount of and recognition of gain or loss)](https://www.law.cornell.edu/uscode/text/26/1001) (checked 2026-10-22)
- [26 U.S.C. § 1221 (capital asset defined)](https://www.law.cornell.edu/uscode/text/26/1221) (checked 2026-10-22)
- [ABA Model Rule 1.6, Confidentiality of Information](https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_6_confidentiality_of_information/) (checked 2026-10-22)

## Forms and precedents for this task

| Form or precedent | Kind | AI level | Summary |
| --- | --- | --- | --- |
| [CGT event and cost base worksheet](https://ailawframework.com/precedents/taxation/cgt-event-and-cost-base-worksheet.md) | Checklist | Yellow | A worksheet for the CGT event, the time it happens, and the five cost-base elements, using the Australian Taxation Office pages on CGT events and the cost base. |

Signed-in accounts can read the full text of each one.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*