Exam 7: Capital Gains and Other Sales of Property

Reuben,a single taxpayer,has wage income of $75,000.He also has a short-term capital loss of $5,000,a short-term capital gain of $2,000,and a long-term capital gain of $3,000.What is Reuben's AGI for 2014?

Aneta sold an apartment building for $713,470 in 2014.She purchased the building in 2008 for $600,000 and has taken $151,806 in depreciation on the building.Assuming Aneta is in the 33% tax bracket,how is her gain taxed?

If the taxpayer's aggregate Section 1231 gains for the year exceed aggregate Section 1231 losses for the year,all such gains and losses are considered to be ordinary.

The taxpayer always reports a worthless security as a long-term capital loss in the year the security becomes worthless.

Genevieve sold 300 shares of stock on June 13,2014 for $52,400.She purchased the shares on the following dates: December 19,2011 130 shares @ $90 per share February 13,2012 80 shares @ $80 per share November 21,2013 140 shares @ $70 per share Assume these shares of stock sold were her only net investment income for 2014. a.Determine the amount and character of the recognized gains or losses on the sale of the stock. b.If Genevieve is in the 33% tax bracket,what is the amount of tax assessed on the sale of the stock considered long term? c.If Genevieve is in the 15% tax bracket,what is the amount of tax assessed on the sale of the stock considered long term? d.If Genevieve is in the 39.6% tax bracket,what is the amount of tax assessed on the sale of the stock considered long term?

If a taxpayer has a net Section 1231 loss for the year,all Section 1231 gains and losses are treated as being capital gains and losses.

If Section 1231 losses exceed Section 1231 gains,the excess is treated as an ordinary loss.

A taxpayer can deduct a loss on a security when the market price of the stock is less than the basis at the end of the year.

Which of the following is Section 1231 property?

Patrice sells a parcel of land for $50,000 cash and the buyer assumes Patrice's liability of $7,000 on the land.Patrice's basis in the land is $40,000.What is the gain or loss she will recognize on the sale?

Section 1231 property is:

A taxpayer who receives only one form 1099-B from the sales of stock can enter the transaction directly to Schedule D.The transaction is entered on Form 8949 and then flows to Schedule

Which of the following statements is correct regarding the sale of ordinary assets as discussed in this chapter?

Geraldine inherited a piece of land when her father Albert died on July 26,2013.The FMV of the land at the date of death was $40,000 and cost Albert $20,000 in 2007.Geraldine sold the land on March 29,2014 for $45,000.What are the amount and nature of the gain on the sale?

The forms used to report a gain or loss on the sale of an asset depend on the classification of the asset being sold rather than on how the asset was used prior to sale.

To figure the gain or loss from the sale of property received as a gift,the donee must know the donor's adjusted basis as well as the FMV at the date of the gift.

The purpose of Code Sections 1245 and 1250 recapture provisions is to restrict the possibility of converting ordinary income into capital gains through use of depreciation deductions.

A taxpayer purchased land in 2007 for $85,000 and sold it in 2014 for $75,000 cash.The buyer also assumed the mortgage of $5,000.What is the amount of gain/loss on the sale of the land?

Gilberto invested in a mid-size local company with gross assets of $16,000,000.Gilberto purchased 1,000 shares for $48,000 in 1999.In 2014,Gilberto sold the stock for $78,000.How is the gain treated for tax purposes?

A computer used exclusively in a sole proprietor's business is a capital asset.