Exam 8: Property Dispositions

Sheldon had salary income of $40,000.In addition, he had the following gains and losses on his property transactions: Long-term capital gain = $14,000; long-term capital loss = $6,000; short-term capital gain = $4,000; short-term capital loss = $8,000.If Sheldon has no other income items, what is his total income before any deductions for the year?

The holding period for an asset acquired by inheritance is determined by including the period the asset was held by the decedent.

Kevin owns a rental apartment building that he purchased several years ago for $100,000.He has claimed accumulated depreciation of $60,000 on this building.In 2019 he sells the building for $110,000.If Kevin is in the 32% marginal tax bracket and has no other property transactions this year, what tax rate or rates apply to his gain from the sale of this building?

Emma sold her home for $60,000 cash and the buyer's assumption of her mortgage of $210,000.Emma paid closing costs of $2,900 and a broker's commission of $13,000.What is the amount Emma realized on the sale?

A taxpayer's initial investment in Section 1202 stock is limited to $1 million.

Ethan, a sole proprietor, sold the following assets in 2019: Equipment \ 30,000 \ 5,000 \ 36,000 XYZ stock \ 12,000 \ 9.000 The equipment was purchased several years ago but the XYZ stock was purchased as an investment on 3/9/19 and was sold on 11/15/19.Ethan is in the 32% marginal tax bracket for 2019.At the beginning of 2019, he had $2,000 of unrecaptured Section 1231 losses from 2 years ago.How much additional tax will Ethan pay as a result of these transactions?

Sophia, a single taxpayer, is one of the founding shareholders of Davis Corporation.She acquired her Davis Corporation Section 1244 stock four years ago for $163,000.During the current year, Sophia sold all of her Davis stock to an unrelated party for $40,000.There were no other capital gains or losses reported on her tax return for the year.What is the maximum amount of loss that can be deducted on Sophia's current year tax return for the Davis stock?

A corporation sells a machine used in its business for 9 years for $22,000.The machine originally cost $120,000 and was fully depreciated.Its gain will be treated as:

Edna had $20,000 of ordinary income.In addition, she had a $1,500 short-term capital gain on one stock and a $4,900 long-term capital loss on another.What is her adjusted gross income?

Lopez Corporation sold equipment that it had purchased for $300,000 ($100,000 cash and a note for $200,000) four years ago.As of the date of sale, Lopez had claimed $187,500 in accumulated depreciation on this equipment and had made $50,000 in principal payments on the note.Lopez received $80,000 cash and a note for $100,000 in addition to the purchaser assuming Lopez's $150,000 note on the equipment.What percentage of Lopez Corporation's realized gain on the sale will be taxed as ordinary income due to depreciation recapture?

All losses on Section 1244 stock are deductible in the year realized.

In 2019, capital gains of individuals can be taxed at 0%, 10%, 15%, 20%, 25%, or 28%, excluding surtaxes.

Quidik Corporation sold a machine for $80,000 that it had acquired three years ago for $68,000.If its adjusted basis when sold was $50,000, what should Quidik report on its tax return as a result of this sale?

Which of the following statements concerning the exclusion available under Section 121 for the sale of a personal residence is correct?

Cliff owned investment stock purchased three years ago for $16,000 and bonds purchased six months ago for $9,800.When he needed money recently, he sold the stock for $13,800 and the bonds for $10,100.What is the amount and type of net gain or loss that Cliff will include in computing his taxable income?

Clem and Chloe, a married couple, sell their principal residence that they have owned and occupied for the past twenty years.The adjusted basis for the residence is $324,000.They incurred selling expenses of $30,000.How much gain must they recognize if they sell the residence for $904,000?

Donza Company has unrecaptured Section 1231 losses from the two previous years totaling $25,000 and a $32,000 Section 1231 gain in the current year.Based on this information, all of the following statements concerning Donza's taxable income for the current year are correct except:

Which of the following is not a requirement for the stock of a corporation to be considered Section 1244 stock?

The Walford Partnership (owned by two individuals) sold an apartment building for $300,000 that it purchased for $280,000 ten years ago.The partnership took $80,000 of depreciation deductions on the building.What is the amount and type of gain realized by the partnership on the sale and taxed to the individual partners?

Angel sells the following depreciable assets from her sole proprietorship: What should Angel report on her income tax return relative to each of these property transactions?