Exam 4: Additional Income Part 2

Karen received a stock portfolio upon the death of her grandmother.The stock originally cost her grandmother $32,000, but was worth $250,000 when she died.What is Karen's tax basis in the stock portfolio? Explain.

The basis of property received as an inheritance is generally equal to the fair market value at the date of death.

If not entirely used in one sale, the unused portion of the $250,000 exclusion on the sale of a taxpayer's principal residence may be used to reduce the recognized gain on the sale of the taxpayer's next residence.

Selma owns a beach cottage that she rents to tourists.In the current year she rented the cottage for 90 days.What is the maximum number of days Selma can use the cottage before her expense deduction will be limited to her gross rental income?

If Betty generates an NOL in 2018 of $16,000 and taxable income of $18,000 in 2019, what is Betty's NOL deduction in 2019?

Russell purchased a house 1 year ago for $150,000 and, due to an employment-related move, sold the house this year for $190,000.What is Russell's taxable gain?

If a capital asset acquired on October 27, 2010 is sold on April 30, 2018 for a gain, the gain is a long-term capital gain.

For purposes of the passive loss rules, income is classified into three separate categories.What are the three categories of individual income? Give an example of each.(1)(2)(3)

Stewart, age 44, sells his personal residence of 4 years on June 14, 2018, for $190,000.The expenses of sale are $15,000 and he has paid for capital improvements of $3,000.Stewart purchased the residence for $100,000.On February 2, 2019, Stewart purchases and occupies a new residence at a cost of $200,000. a.Calculate the gain realized on the sale of Stewart's residence. b.How much gain must be recognized on the sale of Stewart's residence? c.Calculate Stewart's basis in the new residence.