To determine her loss, she needs to know her tax basis. When you give property, such as stock, the recipient’s tax basis used for determining gain or loss is usually your basis. More specifically, since the value of the property equaled or exceeded your basis at the time you gave it to your niece, her basis for determining loss is your basis (plus all or part of gift tax paid on the gift). If the stock had been worth less than your basis when you gave it to your niece, her basis for determining loss would be the date-of-gift value.
Certain employees, such as full-time life insurance salespersons, who may report income and deductions on Schedule C, rather than on Schedule A as miscellaneous itemized deductions.