During the sale of real property, what can the loss be netted against?

The correct choice indicates that a loss from the sale of real property can be netted against gains that fall within the same category, specifically capital gains. This is important for understanding how tax treatment differs based on the nature of the gains and losses involved.

When an individual incurs a loss from the sale of real property, this loss can generally be offset against other capital gains realized during the same tax year. By netting the losses and gains within the same category, taxpayers can maximize their tax efficiency and potentially reduce their overall tax liability. The Internal Revenue Code specifically categorizes different types of gains and losses, and capital gains must be offset against capital losses to determine the net capital gain or loss for the year.

The other options limit the netting process unfairly and do not align with how the tax regulations allow for the offset of gains and losses. For instance, netting only against gains from stock sales or casualty gains would not consider the broader context of the taxpayer's total capital gains and losses, thus undermining the holistic approach that capital loss treatment provides under tax law.