Exam 5: Property Transactions: Capital Gains and Losses

Generally,gains resulting from the sale of collectibles such as antiques,stamps,or artwork are taxed to individual taxpayers at a maximum rate of 25%.

All realized gains and losses are recognized for tax purposes.

Jamahl and Indira are married and live in a common law state.They jointly own real property with an adjusted basis of $200,000.When the property has a FMV of $450,000,Jamahl dies leaving all of the property to Indira.If she later sells the property for $700,000,what is Indira's gain on the sale?

Joel has four transactions involving the sale of capital assets during the year resulting in a STCG of $5,000,a STCL of $12,000,a LTCG of $1,800 and a LTCL of $1,000.As a result of these transactions,Joel will

Gina owns 100 shares of XYZ common stock with a $12,000 basis and a $25,000 FMV.She receives 100 stock rights with a total FMV of $15,000.Answer the following: a.What is the basis of the 100 shares of stock? b.What is the basis of the 100 stock rights?

An individual taxpayer who is not a dealer in real estate plans to subdivide a parcel of land into four lots and sell them at a substantial gain.The parcel of land had been held six years.In order to qualify for capital gain treatment,the individual must satisfy all of the requirements except

On January 31 of the current year,Sophia pays $1,000 for an option to acquire 100 shares of Texas Corporation common stock for $105 per share at any time prior to December 31.As of December 31,Sophia had not exercised the option or sold it.Which of the following statements is correct?

Kate subdivides land held as an investment and Section 1237 is satisfied.The lots sell for $30,000 per lot (basis $10,000).Kate sells five lots in the first year.Kate's ordinary income is

Erik purchased qualified small business corporation stock on December 1,2010 and sold it for a $500,000 gain on December 12,2017.The gain subject to tax is

Taxpayers who own mutual funds recognize their share of capital gains even if no distributions are received.

In the current year,ABC Corporation had the following items of income,expense,gains,and losses: What is taxable income for the year?

Amanda,whose tax rate is 33%,has NSTCL of $25,000,a $30,000 LTCG from sale of a rare coin held 15 months and a $18,000 LTCG from the sale of stock held for three years.By what amount will Amanda's tax liability increase?

Bev has one daughter and three grandchildren.Bev owns approximately $6 million of assets primarily composed of a very valuable parcel of real estate and a savings account of $500,000.Bev can gift $56,000 in total in 2017 to her family members without creating taxable gifts.

Melanie,a single taxpayer,has AGI of $220,000 which includes $160,000 of salary and $60,000 of investment income.She will pay Medicare tax on the $60,000 of investment income of

In the current year,Andrew received a gift of property from his uncle.At the time of the gift,the property had a FMV of $114,000 and an adjusted basis to his uncle of $70,000.After deducting the annual exclusion,the amount of the gift was $100,000.Andrew's uncle paid a gift tax on the property of $24,000.What is the amount of Andrew's basis in the property?

This year,Lauren sold several shares of stock held for investment.The following is a summary of her capital transactions for 2017: What are the amounts of Lauren's capital gains (losses) for this year?

Everest Inc.is a corporation in the 35% marginal tax bracket.It sold two stockholdings this year,resulting in a long-term capital gain of $15,000 on stock A and a short-term capital loss of $5,000 on stock B.What is the extra tax that Everest will pay due to the sales of these stocks?

In 2012,Regina purchased a home in Las Vegas which cost $280,000.Due to increase in the market value of the home,she refinanced her mortgage and her debt on the home totaled $300,000 at the end of 2014.Regina accepted a new job in Dallas in April 2015.Unable to sell her home,she rented it in November 2015,at which time its fair market value was $240,000.In June 2017,she sold the home for $230,000.What tax issues should Regina consider?

Section 1221 specifically states that inventory or property held primarily for sale to customers is not classified as a capital asset of the trade or business.

If the shares of stock sold or exchanged are not specifically identified,the FIFO (first-in,first-out) method of identification must be used.