Exam 7: Capital Gains and Other Sales of Property

Sara owns an automobile for personal use.The adjusted basis is $13,500 and the FMV is $10,500.Sara has owned the car for two years. a.Calculate the realized gain(loss)if Sara sells the vehicle for $12,500. b.Calculate the recognized gain (loss)if Sara sells the vehicle for $12,500. c.Calculate the realized gain (loss)if Sara sells the vehicle for $15,000. d.Calculate the recognized gain (loss)if Sara sells the vehicle for $15,000.

(Short Answer)

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Question 41

Majoo inherited property from his uncle on August 15,2014.His uncle purchased the property on December 10,2012 for $100,000.At the date of his death,the property's FMV was $102,000.Majoo sold the property on September 30,2014 for $105,000. a.What is the gain on the sale of the property? b.What is the nature of the gain?

(Short Answer)

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Question 42

Unused capital losses in any one year carry forward indefinitely to offset any future short-term or long-term gains.

(True/False)

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Question 43

In general,the basis of property purchased is the cost of the asset including cash,debt obligations,and other property or services included in acquiring the asset.

(True/False)

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Question 44

To figure the gain or loss from the sale of property received as a gift,the donor's adjusted basis at the time of the gift is the basis to the donee.

(True/False)

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Question 45

Real property held for investment is a capital asset.

(True/False)

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Question 46

Section 1221 assets are any asset used in a trade or business.

(True/False)

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Question 47

Jake purchased a $300,000 earthmover for his business.He sold the earthmover for $245,000 after taking $210,000 of depreciation.What is the nature and amount of the gain or loss on the sale?

(Multiple Choice)

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Question 48

The holding period for property acquired by inheritance begins on the date of the decedent's death.

(True/False)

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Question 49

Dancing Feet Company,a sole proprietorship,acquired a building for use in the business on April 15,2012,for $475,000.Straight-line depreciation allowed was $25,386.Dancing Feet Company sold the building for $380,000 on May 1,2014. a.What is the adjusted basis of the property at the time of the sale? b.What is the amount of the gain (loss)upon the sale of the building? c.What is the nature of the gain (loss)?

(Essay)

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Question 50

Sylvio purchased an apartment building as an investment in January 2008 for $383,500 and sold it for $475,000 in 2014.He reported $68,436 of allowed accumulated straight-line depreciation.If Sylvio is in the highest tax bracket for ordinary income,how much of his gain qualifies for preferential tax treatment?

(Multiple Choice)

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Question 51

In 2009,Terri purchased 260 shares of Flowers R Us stock at a cost of $9,600 as an investment.In 2014,when the fair market value was $11,400,Terri gave the stock to her daughter,Michele.Assuming no gift tax was paid,if Michele sells the stock for $13,800,she will recognize:

(Multiple Choice)

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Question 52

Jim,the owner of a sole proprietorship,sold the following assets in 2014:

(Essay)

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Question 53

Short-term capital losses first reduce 28% gains,then 25% gains,and if any loss remains,the 20%,15% or 0% group.

(True/False)

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Question 54

The gain or loss on the sale of property held as an investment is recorded on which one of the following forms or schedules?

(Multiple Choice)

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Question 55

On May 1,2013,Kelalani purchased land for $98,000 for use in her business.She sold it on May 2,2014,for $92,000.If there are no other sales of business or trade property,how is this loss treated for tax purposes on Kelalani's return?

(Multiple Choice)

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Question 56

All gains and losses on the sale of property that was held for more than one year is subject to preferential tax rates.

(True/False)

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Question 57

In 2005,Savannah purchased 200 shares of Hi-Style stock as an investment.The stock cost $12,000.In 2014 when the fair market value was $14,000,Savannah gave the stock to her daughter,Daniele.If no gift tax is paid and Daniele sells the stock for $15,000,she will recognize:

(Multiple Choice)

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Question 58

A taxpayer has 6 separate capital gain transactions.Four of them are long-term and two are short term transactions.Two of the long term transactions have box 3 from Form 1099-B checked,one does not have box 3 from Form 1099-B checked,and there was no 1099-B received for one of the long term transactions.One short term transaction has box 3 from a 1099-B checked and the other transaction does not have box 3 from a 1099-B checked.How many Form 8949 must the taxpayer complete?

(Multiple Choice)

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Question 59

Joe received a parcel of land as a gift from his sister,Lisa,in 2009.At the time of the gift,the land had a FMV of $10,000.Lisa purchased the land in 2005 for $13,000.If Joe sells the land in 2014 for $22,450,he will report a

(Multiple Choice)

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Question 60

Showing 41 - 60 of 123

Unused capital losses in any one year carry forward indefinitely to offset any future short-term or long-term gains.

In general,the basis of property purchased is the cost of the asset including cash,debt obligations,and other property or services included in acquiring the asset.

To figure the gain or loss from the sale of property received as a gift,the donor's adjusted basis at the time of the gift is the basis to the donee.

Real property held for investment is a capital asset.

Section 1221 assets are any asset used in a trade or business.

Jake purchased a $300,000 earthmover for his business.He sold the earthmover for $245,000 after taking $210,000 of depreciation.What is the nature and amount of the gain or loss on the sale?

The holding period for property acquired by inheritance begins on the date of the decedent's death.

In 2009,Terri purchased 260 shares of Flowers R Us stock at a cost of $9,600 as an investment.In 2014,when the fair market value was $11,400,Terri gave the stock to her daughter,Michele.Assuming no gift tax was paid,if Michele sells the stock for $13,800,she will recognize:

Jim,the owner of a sole proprietorship,sold the following assets in 2014:

Short-term capital losses first reduce 28% gains,then 25% gains,and if any loss remains,the 20%,15% or 0% group.

The gain or loss on the sale of property held as an investment is recorded on which one of the following forms or schedules?

On May 1,2013,Kelalani purchased land for $98,000 for use in her business.She sold it on May 2,2014,for $92,000.If there are no other sales of business or trade property,how is this loss treated for tax purposes on Kelalani's return?

All gains and losses on the sale of property that was held for more than one year is subject to preferential tax rates.

In 2005,Savannah purchased 200 shares of Hi-Style stock as an investment.The stock cost $12,000.In 2014 when the fair market value was $14,000,Savannah gave the stock to her daughter,Daniele.If no gift tax is paid and Daniele sells the stock for $15,000,she will recognize:

Joe received a parcel of land as a gift from his sister,Lisa,in 2009.At the time of the gift,the land had a FMV of $10,000.Lisa purchased the land in 2005 for $13,000.If Joe sells the land in 2014 for $22,450,he will report a

Introduction to Taxation, the Income Tax Formula, and Form 1040ez

Expanded Tax Formula, Forms 1040a and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

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At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

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