Exam 8: Capital Gains and Losses

Perry acquired raw land as an investment in 1996.The land cost $60,000.In 2013,the land is sold for a total sales price of $120,000,consisting of $10,000 cash and the buyer's note for $110,000.Assume that Perry uses the installment method to recognize the gain and receives only the $10,000 down payment in the year of sale.How much gain should Perry recognize in 2013?

Elmer sold machinery used in his business for $20,000.The machinery originally cost $75,000 and had $40,000 of accumulated depreciation at the time of the sale. a.What is the gain or loss on the sale of the machinery? b.Is the gain or loss treated as capital or ordinary? Explain.

Sol purchased land as an investment on January 12,2004 for $85,000.On January 31,2013,Sol sold the land for $90,000 cash.What is the nature of the gain or loss?

Robert and Becca are in the 25 percent tax bracket.They have a long-term capital gain of $27,000 and a long-term capital loss of $18,000 on sales of stock in 2013.What will their capital gains tax be in 2013?

Which one of the following qualifies as a like-kind exchange?